Digital Dominance Is Fundamentally Changing Retail Brands

BY: MARY FEILD

APRIL 26, 2017

Kenneth Cole recently announced the retailer will effectively close the great majority of its brick-and-mortar stores through 2017. For retailers, this move is less of a shock and more of a wakeup call as the growth of ecommerce and digital technologies has fundamentally changed the industry. After 30-years as a high-end clothing brand, the retailer will instead focus its resources in its online store.

In an email to Bloomberg, Chief Executive Officer Marc Schneider explains their change into a digital-first store. “As we continue on our path of strengthening our global lifestyle brand, we look to expand our online and full-price footprint across the globe. We need to focus our energies and resources to better serve the consumer on their terms.”1

Kenneth Cole isn’t alone in leveraging digital strategies to better appeal to customers. Many other retail brands are feeling the squeeze of the industry’s decline and are fundamentally revamping the way they engage with customers. Along with closing brick and mortar stores, retail brands are implementing creative strategies that cater to digital demand.

“Along with closing brick and mortar stores, retail brands are implementing creative strategies that cater to digital demand.”

HUGO BOSS AND “CLICK AND COLLECT”

Hugo Boss is one of many luxury good brands that have seen struggling sales in recent years. The brand will close 20 stores by the end of 2017.2 As a result, many stores like it have plans to link in-store activities with online sales through services like “click and collect”.

Some analysts project ecommerce sales growing to represent as much as 20% of all luxury good sales.3 However, the shipping industry has struggled to maintain their delivery promises as the volume of ecommerce continues to grow. To greater control their online shopping experience, brands like Hugo Boss are employing “click and collect” to offer a satisfying experience at purchase fulfillment.

The company also plans to invest more into digital marketing by 70% through 2017 to build appeal of its online stores.4 This is a major change when compared to the 50-50% split.

UNDER ARMOUR IS MERGING APPAREL AND LIFESTYLE

Under Armour is taking a unique approach by fostering a growing fitness community through the digital technologies of their wearables. From the UA Band to the Speedform Gemini series, these apparel products are fitted with readers that can sync to mobile applications. These products then become the vehicle with which users can track their athletic performance overtime.

According to Under Armour, the brand has approximately 200 million registered users worldwide and continues to see rapid growth.5 Users have access to a plethora of detailed fitness information like sleep patterns, nutrition logs, geospatial data, and more. Offering users access to this information effectively ties the Under Armour brand with the wearer’s athletic goals and achievements.

THE CONTINUING EVOLUTION OF BRICK-AND-MORTAR RETAIL

The takeover of retail by ecommerce is nothing new, but now retailers seem more prepared to make fundamental changes to their businesses in response. Like we noted, Hugo Boss and Kenneth Cole are moving their resources to the ecommerce front with online stores and “click and collect” fulfillment. Brands like Under Armour are building brand loyalty by expanding the reach of their customer’s experience. As brick-and-mortar retail evolves, the industry will continue to experiment and fundamentally change their strategies to align themselves to be closer to ecommerce and digital technologies.

1. Lauren C. “Kenneth Cole to Shut Down Almost All Its Brick-and-Mortar Stores”. Bloomberg. https://www.bloomberg.com/news/articles/2016-11-11/kenneth-cole-to-shut-down-almost-all-its-brick-and-mortar-stores↩ 
2. Aaron R. “Hugo Boss Consider Closing Some Stores as Earnings Plummet”. Bloomberg. https://www.bloomberg.com/news/articles/2016-05-03/hugo-boss-considers-closing-stores-as-earnings-miss-estimates↩ 
3. Emma T. “Hugo Boss to make online push to help revive sales”. Reuters. http://www.reuters.com/article/us-hugo-boss-results-idUSKBN16G1QN↩ 
4.Ibid. ↩ 
5. David T. “Under Armour Transforms into World’s Largest Digital Fitness Brand”. Forbes. https://www.forbes.com/sites/sap/2017/03/15/under-armour-transforms-into-worlds-largest-digital-fitness-brand/#14fff58d331e↩ 

ABOUT THE AUTHOR:

Mary loves creating engaging copy that expresses the best story possible. As a member of our marketing and communications team, Mary works hard to communicate the value our products and Square Root’s mission with a positive attitude and a quick wit. Inspired by solutions and products that make people’s lives easier, she is fulfilled by knowing her work makes the world a better place one way or another. She holds a bachelor’s degree in political science and master’s degree in communication both from the University of Arkansas.

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