By Jim Tompkins
CEO, Tompkins International
Last week I read multiple articles regarding the closing of brick and mortar store locations throughout the US. The titles of a few articles stated "Hope" and "Dying Slowly". I found these words to be interesting and puzzling in regards to plans for closing one-fourth of a retailer's brick and mortar store locations. Is there really "Hope" when closing such a large amount of locations? Is this really "Dying Slowly"?
I do not believe "Hope" is a strategy. You cannot hope that closing brick and mortar locations will bring profitability. In 2012, 56% of retailers offered a mobile application for smartphones, according to a study by Crossview. This makes it clear that the importance of multichannel retail has been in place for some years now. Retailers need to adapt to what is happening now - omnichannel. As I have predicted, e-commerce has taken a huge toll on brick and mortar stores and retailers need to adjust their supply chain. A supply chain now must accommodate the need to be omnichannel retail, omnichannel logistics, and omnichannel delivery.
I also do not believe "Dying Slowly" is correct; this is a fast death. This is not current news. I stated in my video "The Alibaba Effect" a year ago that this was coming. These times are tough, there are new complexities, challenges, and difficulties to address. "The future isn't what it used to be," Yogi Berra famously said. Retail is at a crossroads. In order to be profitable a company must sell through multiple channels, not just brick and mortar. A company needs to have the right strategy, right technology and right supply chain structure. A properly designed supply chain will increase capabilities, focus on target customers, create value proposition for product offerings and services, along with maximizing the economic value.
Omnichannel retail is a multichannel approach to retail that provides the customer with a seamless shopping experience. Whether the customer is shopping online from a computer or mobile device, or in a brick and mortar store, seamless inventory visibility and seamless continuous improvement must be present. Omnichannel logistics is a multichannel approach to network planning, combined distribution centers/fulfillment centers/returns centers/liquidation centers, and lean facilities planning.
The Alibaba Effect and e-commerce are fast moving trains and retailers need to jump on board or die.