"Reports of the death of the retail store, I think, have been greatly exaggerated."
So says Dr. Alan Treadgold, the head of retail strategy at Leo Burnett Worldwide. The Chicago-based ad agency -- creator of such legendary marketing icons as the Jolly Green Giant, the Pillsbury Doughboy and the Marlboro Man -- has recently completed an in-depth study of consumer behavior, surveying 2,200 adults from across the country.
Headed into Black Friday, one of the biggest shopping days of the year, we spoke with Dr. Treadgold about the future of retail stores: how they'll survive the internet, who's winning and losing in the current economic environment, and what it means for us, the shoppers.
Stores: Pick your head up -- and step your game up
One central finding in Treadgold's study is that, despite the meteoric rise of online shopping, there's still a wide swath of the consumer market that values brick-and-mortar retail. "There are many types of shoppers that continue to be motivated to shop in store for the experience," he said.
In fact, the study identified six particular types of retail experience that shoppers look for when they skip the website and walk into a store. On one end of the spectrum are what the study called "All About Atmosphere" retailers -- the Barnes & Nobles, Tiffany's and Abercrombie and Fitches of the world. Consumers at these stores "talked about service being important, product knowledge being important, the physical architecture creating really immersive experiences," Treadgold explained. "They talk about being able to touch and feel and try the product."
On the other end are "Price Led Stores" like CVS, Target and TJ Maxx, where shoppers value the ability to compare multiple products and brands side-by-side and find the absolute lowest prices, another experience that can be hard to recreate online.
There are plenty of reasons folks will continue to turn to physical stores instead of the internet for certain types of shopping. What can the retailers do to keep people coming in? First and foremost, Treadgold says: plain ol' customer service.
"Shoppers still want retailers to get it right on the basics: the right product, in the right location, at the right price. And they get frustrated when retailers are not delivering on those basics."
Winners on the Mag Mile
We asked Dr. Treadgold to take an imaginary stroll with us down North Michigan Avenue, Chicago's "Magnificent Mile" of retail. (He spoke to us from London.)
"The standout brands on the North Michigan strip are Apple and Victoria's Secret," he said. At both of those locations, shoppers value and enjoy the experience of being in the store in a way that transcends the hunt for the product. "In the case of Apple, there's a sense of community, there's a sense of innovation, of searching out the new. In the case of Victoria's Secret, it's about creating an immersive, intimate atmosphere."
But he also pointed out two apparel stores, Zara and H&M, that have had success in recent years. Treadgold credits the brands' ability to create the air of fashionability while keeping prices down, pointing out the massive response to H&M's new "Lanvin" line.
The retailers "are low-price, affordable fashion, which is very consistent with the mood of the times. But there's also a sense of experience and leading-edge design about those stores," he said.
They stand in contrast to a store like The Gap, which has struggled in recent years to appear innovative and fashionable.
Black Friday still beats Cyber Monday
When we asked Dr. Treadgold if he thought Black Friday would suffer this year -- the lines, the crowds, why not just buy online? -- he again reminded us that it's all about experience.
"Going to the retail store [on Black Friday] is almost a treasure-hunt experience. That still resonates with a lot of consumers, particularly value-oriented consumers, who may complain about the waiting and the car parking and all that. There still is a lot of appeal about the treasure hunt experience: feeling that you're getting a bargain, and that you're a savvy, smart consumer as a result."
The stores that will be successful on Friday, he says, are the ones that use their marketing dollars and their store environments to heighten that sense, to make shoppers feel like they'll be able to find deals they couldn't get on any other day of the year. Department stores like Macy's and Bloomingdale's, he notes, have been especially successful at that ploy.
Technology is still annoying, but not for long
The future of retail looks more and more like a digital-physical hybrid, Dr. Treadgold told us. He talked about innovations like digital kiosks where customers can try products before they buy them, or screens where shoppers can try on clothing virtually instead of physically.
One problem: no one really likes that stuff. "The shopper's experience of in-store technology has been largely underwhelming," Treadgold said. That may be because stores have largely looked at technology as a cost-saving measure -- one less employee to pay -- rather than as an enhancement to the overall shopping experience.
"I look at that as an area where retailers can do better, and shoppers will be expecting them to."
Holiday shopping: bad for them, good for us
"I think collectively, our view is that the holiday season is going to be difficult for retailers," Treadgold admitted. "I think whether the U.S. is technically in or out of a recession isn't the point. The consumer mindset is a very recessionary mindset. It's delaying purchases when you don't have to make purchases, it's making your spend go further."
The good news: stores will be doing a lot of discounting, possibly at the expense of fatter profit margins, to keep the stores busy and the cash registers ticking.
"There's going to be an awful lot of product available, and I think there's going to be some aggressively tempting deals to be done. I think as a shopper in Chicago, I'd be looking very hard at the good deals I could do over what I think is going to be a very shopper-friendly holiday season."