Episode 19: Gen Z loves brick & mortar, High-end dept stores getting creative, TJX ‘home market’ stores

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Gen Z Loves Brick & Mortar

Sixty percent of Gen Z shoppers still prefer to purchase in-store, and 46% will still check in store to get more information before making an online purchase. In the U.S., 77% of Gen Z respondents said that brick-and-mortar stores is their preferred shopping channel.

The research also revealed that Gen Z shoppers are interested in new shopping methods. Nearly three-quarters (73%) of Gen Z shoppers are interested in curated subscription-type offering for fashion, and 71%  are interested in automatic-replenishment programs, with an overwhelming majority willing to shift more than half their purchases to a retailer offering this service.

Some takeaways:

  1. The majority of US consumers have purchased apparel both online and offline, however, brick-and-mortar is still the dominant transaction channel.
  2. In fact, US consumers’ attitude towards fashion and their purchase behavior has changed little over the past five years.
  3. We expect brick-and-mortar to remain the dominant store format for US apparel and footwear retail in the near future.
  4. As retailers have shifted their budgets to digital advertising, the influence of all major media channels has decreased in the past five years, except for social media and mobile video.
  5. Among millennials, the influence of social media on apparel purchases is on par with traditional media like TV and magazines.

High-end Department Stores Getting Creative

Like many retailers, the high-end department store’s sales have suffered from a dwindling number of in-store shoppers. Rather than disappear, they are making an attempt at bringing people back into their stores through interactive tech. Will it work? We don’t know.

Some examples of efforts Neiman Marcus is making:

  • Memory Mirror
    • The Memory Mirror is a full-sized shopping mirror where shoppers can record themselves twirling in an outfit and then share on social media (a video demo can be seen here).  It’s been such a hit with consumers that this past December, the technology moved into the beauty department, with Neiman Marcus rolling it out at Le Métier de Beauté beauty counters in at least 20 locations, with plans to expand further this year.
  • Shazam for shopping
    • Neiman Marcus is also introducing Snap, Find, Shop; what they call Shazam (the music discovery app) for shopping. Essentially, consumers can take a photo of a piece of merchandise that they like—say a friend’s pair of shoes—and then the app will find similarly styled items to purchase directly from NM.
    • While the project hasn’t been a success yet, Emmons hope that it will pay dividends in the future as the use of augmented reality becomes more commonplace.
  • Voice recognition
    • In a similar vein to Amazon’s Alexa and Google Home, Neiman Marcus is testing voice-command technology that will help streamline employee communications with the backroom.
    • “It’s a little wearable computer about the size of a key fob and when you press the button you give a voice command. It might be, ‘Hello shoes,’ and it’s going to connect you to an associate in the shoe department or you might say, ‘Hello register help’ and it sends out the all-call for register-trained associates to come man the registers in the store,” Emmons explained. “With future enhancements, it could be things like, ‘Hello SKU lookup,’ and I could then read a SKU and it could tell me which stores had that item in stock.”

TJX to Launch New ‘Home Market’ Stores

TJX Companies — Marshalls, T.J. Maxx, HomeGoods & Sierra Trading Post — is planning to launch a new off-price chain of home good stores. CEO Ernie Herrman told analysts on recent earnings call that the new stores will not compete directly with HomeGoods.

“While we are proud to have grown HomeGoods’ customer base for many years, we believe we remain significantly underpenetrated in the total U.S. home market and enormous opportunity remains for us to gain share in this space.”

The company plans to open four of the new concept stores this year. TJX has been testing many of the home categories that it plans to sell in the new stores for the last year-and-a-half.

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