It's Official. Stores Suck.

After one of the longest and strongest periods of economic growth in the post-war era, brick-and-mortar retail continues to struggle.  Credit Suisse predicts that 25% of U.S. mall space will close by 2022.

This doesn’t even seem possible.  Amazon has grown in a meteoric way over that period. Their valuation is now larger than Walmart, J.C. Penney, Target, Macy’s, Best Buy, Kohl’s and Sears.  Combined.

You don’t need a long recitation of causes.  Just google “why retail is dying” and you will see them all.

At the same time, you see Amazon and Warby Parker and Tesla and other strong brands invest significantly in physical stores.  Obviously, the concept is not dead.

Maybe the execution is.  The world is awash in things.  Americans spend $40B annually just storing stuff we have no use for.  We can buy goods anywhere and everywhere.  We have more retail space per capita than any major country in the world.

But experiences?  Connections?  We can never get enough of those, and if you look at the growth in the travel and hospitality industries, you see that craving.

The answer is simple: brands that sell product must offer much more.  You think Starbucks is selling COFFEE at $5 per cup?  Uh, no.  They are selling community and a sense of place, the white collar equivalent of the tavern next to the plant.

Who says it is OK to come in, linger for hours, use my bathroom and my wi-fi, and leave without buying anything?  A friend, that’s who.  That is what Starbucks is selling. 

That is the future of marketing: turning a stranger into a friend.  Not a satisfied customer.  A  friend.

Don’t fetishize the product, because the product is just a part of what your customer is buying.  When is the last time you met someone wearing a Rolex who dives to 100 meters anyway?  The scariest place most Land Rover customers venture is the parking lot at Whole Foods.  Both of these brands know that their customers aren’t buying products as much as a better version of themselves, and they both fill that more emotional need brilliantly.

Start selling direct, because that direct connection is a big part of what customers are buying.  It can be a digital or physical presence; when you achieve scale, maybe it’s both.  A good retailer carrying multiple brands can serve as an effective brand ambassador who does help form that connection with your brand, but it is harder, and the market is telling you that the ones who do it successfully are few and far between.