There is no doubt about it; the retail industry is going through a massive shakeup. Department stores are missing revenue targets. Shopping malls, formerly the cultural epicenters of American suburbia, are losing foot traffic. And many upscale brands have regressed from selling out of exclusive apparel lines at full price— to deep discounting and Solar Eclipse-inspired online flash sales.
Despite these trouble signs, it’s estimated that more than 80 percent of U.S. retail sales will still happen within the four walls of a store in 2020. For many businesses, making a complete migration from in-store retail to e-commerce is simply not strategic.
As the debate over the “Retail Apocalypse” rages on, brick-and-mortar retail stores are far from dead. A recent report by IHL Group found that only 16 chains account for a whopping 48.5% of the total number of stores closing in 2017, and five of those 16 represent a 28.1% chunk of total closings.
So, while “Retail Apocalypse” makes for a great headline, it’s not necessarily an accurate depiction of the industry as a whole. In truth, it’s a magnified representation of a small subset of companies that have failed to innovate and adapt to the way consumers shop in today’s digital economy. Case in point: 42% of retailers saw a net increase in stores while only 15% experienced a net decrease in 2017.
With that said, competition is intensifying and operating costs will continue to increase. Savvy retailers will continue to seek out creative ways to save on operating expenses and widen profit margins. Now, more than ever, strategic investment in innovation will be the differentiating factor in deciding which retailers dominate the competitive landscape. When it comes to facilities management, that means doing more with less.
Learn how strategic retailers are innovating to maintain a competitive edge:
The disconnected ecosystem of retail operations
Retail has come a long way during the last 50 years. Major chains have expanded their store portfolios across large geographies, updating equipment like HVAC systems, lighting controls and energy management systems along the way. The result? Retail operations’ Achilles heel: a very disconnected ecosystem of building systems and equipment.
At this pivotal moment for brick-and-mortar retail, facility management professionals lack centralized visibility and control of the day-to-day operations in dozens, hundreds and even thousands of store locations. How can they drive down costs, reach corporate sustainability goals and prevent costly equipment failures when they’re trapped in a cycle of ad hoc, reactive maintenance?
Fueling the future of retail with smart building technology
Leading retail companies are using smart building technology to break free from building management restrictions. They’re taking advantage of the next generation of facilities management software to optimize building performance, gain an edge against competition and empower their teams to work smarter, not harder. The Switch Automation Smart Building Platform enables retailers to:
- Gain real-time visibility into store portfolio performance
- Deploy a proactive maintenance model and save 5-10% on repairs
- Save 10-20% on energy costs
- Right-size store portfolios to serve the right customers in the strongest markets
- Gather valuable insights about evolving customer preferences
- Promote a positive brand image
This is not the end of the retail industry and in-store shopping, just a seismic shift. After the dust settles, a new landscape will emerge and its horizon will be dotted with innovators.
Want to learn how your company can successfully adapt to the retail industry’s changes?
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