Retail Conundrum: What to Do With Physical Stores?

Retail executives say enhancing stores is a top challenge

April 14, 2017

Retailers are asking themselves, “What do we need to do with our stores?”


A survey of retail executives, the vast majority of them from primarily brick-and-mortar chains, found widespread concern about enhancing the value of their physical stores.

The polling from RIS News and Gartner found that more than one-third of respondents said optimizing stores and upgrading store-level bandwidth and infrastructure would be a top challenge in the coming years.

Worry about physical stores fits the industry narrative of the moment, with chain after chain announcing new or expanded efforts to shutter brick-and-mortar locations. A recent study estimated that efforts to close stores actually need to be accelerated if the industry as a whole is to address a glut of retail space.

The concern among retail executives aligns with recent consumer surveys showing that consumers still value in-store experiences even as they express a desire to be left alone to shop and research with their phone while wandering the aisles.

“The challenge is how to enhance the physical assets by combining them with new strategies, technologies and experiences,” the RIS/Gartner report said.

On a related note, the single most cited challenge for retailers in the survey was “retiring legacy systems.” But concern about software and hardware is a perennial business challenge; roughly the same number of retailers expressed concern about this matter last year.

Meanwhile, Amazon (and other online sellers) figured as a top challenge to a growing number of executives. Some 29% cited that concern, up from 21% a year earlier.

In a new question added to the annual survey, which has been conducted for a quarter century, executives identified “multichannel frequent shopper tracking” as the “top technology” for 2017.

One significant change from last year to this was a considerable reduction in anxiety about customer data security. This likely is a sign of successful efforts to upgrade security systems, but may also reflect the passage of time: The 2013 security breach at Target, arguably the highest-profile security lapse the retail sector has ever seen, took place more than three years ago and may loom a little less large in retailers’ memories. 


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