The Bensman Retail Report - Retailers Are Driving Consumers Out The Door

Justin Yelda

Paul Bensman, Associate Broker / CEO at Locations Commercial Real Estate Services

On my flight back from this year’s ICSC (International Council of Shopping Centers) Convention in Las Vegas, I spent some time wondering why some upscale retailers are actively driving business away from their own stores.

Many brokers, retailers, and shoppers, blame online sales for the demise of bricks and mortar stores. Yes, online shopping is a rapidly growing retail segment, but it’s been a factor for decades. Struggling retailers must accept the blame for their declining in-store sales and admit that they have hurt themselves by abandoning the value proposition that has fueled bricks and mortar retail over a century.

Retailers use online sales figures as an excuse to reduce inventory and skimp on the service and “experience” aspects that attract consumers to in-store shopping in the first place. We’ve all experienced the results.

I used to frequent Lord & Taylor for my clothing, but over the last two years my shopping experience has been getting worse and worse. Before you even enter the store, you see a sign on every door, “Shop LordandTaylor.com 24/7.” I just drove to the mall, and it feels like they’re you’re telling me “turn back, don’t even waste your time here.”  Once I pass all the signs telling me to shop online, I enter the store and make my way to the men’s dress shirt department. The inventory in this department is less than half of what it was a few years ago, and half of the available selection is “slim cut.” Sorry, that won’t work for me; maybe my right arm can fit into a slim cut. After spending some time looking for a shirt in the color, style, and size I want, I am ready to give up. I decide to find a sales associate to help me. This is almost as hard as hailing a New York taxi on Broadway during rush hour. After sending up smoke signals and waving my arms, I finally find a sales associate. I ask them if they can help me find the shirt that I am looking for. First they search the racks, then they go to the back room, and then they tell me, “we don’t have one in stock, but we can ship it to you in two days with no shipping cost.” I say, “No thanks, I want it for a wedding I am going to tonight.” This whole process takes almost 30 minutes. I leave the store and go into the mall to try to buy a shirt somewhere else – someplace with more inventory on hand.

Next, I stop at Nordstrom to pick up some shoes. I have been shopping Nordstrom’s shoe department for over 30 years – they are the only store that stocks my size. I head to the shoe department and start looking for the shoe I want. I cannot find it. I ask a sales associate if they carry it. The associate says “we only carry it online.”  After she tells me this, I notice another customer trying on shoes, and his salesperson tells him that they are out of all the styles he wanted in his size. The selection in the men’s shoe department half the size it used to be. 

I leave the mall empty handed, go home and turn on my computer. I decide to check out Zappos – an online shoe retailer. I find the same shoe style and brand that I was looking for at Nordstrom. Not only are they the same shoes, they are $59 less. Sorry Nordstrom, you lost a longtime loyal customer. Price was not even the issue when I was in your store. I gladly would have paid $159 for the shoes, if you had them in stock. But your lack of inventory turned me into an online shopper, and once I was forced online, I had the opportunity to focus on just getting the best price.

Here are my words of wisdom for the upper-end department stores. Remember the place in the market you used to represent; stores with high quality merchandise, large selection, and excellent customer service. Don’t forget that customers still value great service. Smart retailers are using digital and mobile to enhance the in-store experience, not replace it. I predict that retailers who choose to short-change their in-store customers will enter the retail graveyard.

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