The rate of change has never been greater — or faster — for the footwear industry, with new challenges popping up every day in nearly all corners of the business, from navigating cash crunches and supply chain issues to understanding the latest technological advances. In its “Ask An Expert” series, FN asks industry leaders — all solutions-based providers — to take on some of the most timely topics.

Physical retail has been struggling for some time, with some observers even questioning whether the channel is dead. A new surge in DTC brands opening concept stores showed there was life in the model yet, but COVID-19 is now making the selling environment tougher than ever for titans and newcomers alike. Retailers are battling changing store restrictions and a wary consumer, turning store strategy into a balancing act of risk-taking and caution.

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Amish Tolia, co-founder and co-CEO of turnkey retail solution Leap, spoke with FN about how brands can be smarter about store operations during this challenging period, without giving up their physical presence.

FN: The pandemic has created more difficulty for what was already a tricky business: store retail. What do you see as the biggest challenges facing physical stores right now?

Amish Tolia: Generally speaking, the biggest challenge in branded retail is that physical stores can become a strain on the business — versus an accelerator — due to the risks involved, like upfront buildout costs and lease liabilities. Now, especially with shopper traffic and tourism down in major cities due to the pandemic, it’s imperative to approach physical retail with effective risk mitigants: a highly thoughtful design build that is cost-efficient while still compelling for the shopper, with lease terms that limit long-term liabilities. These locations should also be equipped with the technology to create the omnichannel brand experience that today’s consumer demands.

FN: For brands and retailers who don’t want to close up their stores entirely, are there any strategies they can implement to still get use out of their brick-and-mortar properties?

AT: The role of the store in 2020 and beyond is so much more than a place to touch, try on and transact. The role of the store has evolved a full 180 degrees to act as a marketing billboard, a signal of credibility, a logistics hub for returns and order fulfillment, and a way for store associates to provide great customer service and build lifetime value.

For brands to get the most out of their stores, they must be fully omnichannel by utilizing options like buy online, pick up in store; curbside pickup via phone or text; and private appointments (in-store and virtual). In addition, the store team must engage in-store shoppers. Well-informed, knowledgeable and energized retail associates, with the skill to personalize each experience, make visiting worthwhile for the customer, which translates to increased customer engagement and lifetime value across the brand’s channels. If stores cannot open traditionally, then leverage locations as micro-logistics hubs for e-commerce order fulfillment, which both saves money and cuts down shipping time.

FN: What are some techniques that companies can use to manage their rent and real estate fees during this period?

AT: Landlords want the same thing tenants want: sustainable, profitable stores. At Leap, we’ve had success in maintaining strong partnership dynamics with our store landlords through open, collaborative dialogue. This looks like showing the landlord what we’re seeing in terms of shopper traffic and sales (versus pre-COVID) and how we see that shaping up over time — and showing we understand they have costs and risks of their own too. This helps to get alignment around the table on revised rent terms that maximize the chance of success, while managing through the pandemic disruptions and whatever economic recovery might look like on the other side. Being data-driven helps to objectify what might otherwise be pretty difficult discussions.  Also, an asset-lite approach to design and build gives more leverage as you are easily able to pack up and move locations if the real estate terms are not mutually agreeable.

FN: How might brands and retailers reimagine their space in a pandemic-friendly way?

AT: Luckily this isn’t as challenging for retail as it is for some other experience formats that are truly dependent on dense use and occupancy for extended periods of time, like sports and music venues. Modern retail, in particular, tends to be pretty spacious to begin with. Effective measures thus far seem to be: considering shopper journey and traffic flow and adapting fixture layouts accordingly; capping max occupancy and offering contactless payments to promote social distancing; and adapting standard operating procedures to implement even more frequent cleaning and staff health and safety checks. It’s key to clearly communicate to customers what measures are being taken to put health and safety first, and even offer masks and sanitizer for their confidence and comfort. Implementing new ways to shop, such as curbside pickup and virtual appointments, are a final step to make sure the store can easily be shopped by anyone and everyone.

FN: Looking ahead, how do you envision a successful physical store strategy?

AT: Overall, a successful store strategy must be viewed more holistically than ever before. Stores must provide a great customer experience with omnichannel capabilities that seamlessly complement e-commerce. Elements of this, which may have been a nice to have in the past, are now table stakes for success. Leveraging physical locations to help power and improve the overall brand experience, such as micro-logistics capabilities, is going this way too. Although these things are relatively new, as always it still comes down to customer experience. Since we’ve reopened our stores in New York, San Francisco and Miami over the last several weeks, we’ve seen shoppers returning with strong intent, and our team members have been invigorated by this. We believe stores will play a part in this, even as e-commerce improves and evolves, long into the future.

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