Clothing retailers boost capital spending, refocus on experience
Consumers are casting their recessionary spending habits aside as the economy continues to recover, with many opening their wallets and spending more money. In response, clothing retailers are similarly investing more into operations to capture consumer spending, Bloomberg Businessweek reports.
According to a new report from Fitch Ratings, the retail industry is expected to boost capital spending to $35 billion this year – a 20 percent increase compared with $29 billion in 2009. However, that doesn't necessarily mean opening new brick-and-mortar locations. Instead, many are focusing on raising same-store sales and investing in other ways to make store operations better, such as mobile point-of-sale (POS) terminals.
By implementing new technologies and other innovations, merchants are hoping to improve the in-store experience. In the eyes of many major retail brands, brick-and-mortar is no longer competing with ecommerce – it's growing increasingly difficult to provide the same prices in-store that consumers can get wherever they shop online.
Instead, retailers are trying to make shopping at physical locations a unique experience. Many are taking inspiration from Apple in that regard and focusing on personalized service made specific to the shopper. Merchants want to make shopping at brick-and-mortar stores a truly engaging experience compared with ecommerce.
"What really good retailers around the world are now looking at is how do they create a unique experience in the physical store that gets people [to] come in and want to participate in that," Wendy Liebmann, chief executive officer of WSL Strategic Retail, told the news source.
"There are so many reasons for people not to come or not to come as often. It becomes really important to create more compelling and easier to shop environments that people feel is theirs, their store," she added.
As consumers becomes more optimistic in their financial standing, they are growing increasingly willing to spend more money. This means higher costs in-store may not be as much of an issue, provided they feel like they are getting a better value from the shopping experience.
"We think the consumer is getting more confidence, and with that, the stores are getting more confident to expand," said Laura Pomerantz, founder of commercial real estate advisory firm PBS Real Estate. "Stores have to be entertainment, they have to be service-oriented, which has clearly become very, very important to the consumer."
One way many retailers are boosting sales is through ShopKick initiatives, which encourage customers to come in and spend points earned through loyalty programs.
