What’s New in Retail in 2020?
At SPAR, we hope that the start of the new decade is going great for everyone reading. Whether you have been in business for years and have a loyal customer base or you’re planning on expanding in 2020, staying up to date on the news of the industry can give you new ideas and insights. It pays to stay on top of the retail industry as it’s ever-changing and evolving – you want to be as informed as possible. We’ve been keeping an eye on the news lately, so keep reading to learn more about some of the most interesting stories we’ve come across at the beginning of 2020.
Amazon to Launch Luxury Fashion Platform
Consumers are already used to finding everything they need on Amazon, which has proven to be detrimental to many brick and mortar stores, but the e-commerce giant is looking to expand its offerings even further in 2020. The company recently revealed plans for its own digital platform for luxury fashion, where brands will be able to pay a percentage of their sales to be featured by Amazon. The companies that sign on will have control over the way their “shop” looks and what products they do and don’t sell, and they will be given access to Amazon’s logistics network for delivery and customer service. This service may prove to be appealing for luxury brands because of the prevalence of Prime memberships among Amazon customers, which are commonly found in higher-income households. Amazon seems to expect success to come from this endeavor- reports say that it will be opening a warehouse specifically for the luxury fashion platform and putting $100 million towards marketing efforts. The company isn’t new to selling clothing, so we’ll have to wait and see how luxury fashion offerings are received by Amazon customers.
CVS Expands HealthHUB Concept
This particular piece of news is one that first appeared last year, but is getting new attention as 2020 begins. Towards the end of 2018 and into 2019, CVS opened its first HealthHUB locations – remodeled CVS stores that focus more on health services and products than standard CVS offerings. HealthHUBs include a health clinic that gives visitors access to blood testing and other health screenings, wellness services such as yoga, and guidance from dieticians and respiratory specialists. It is safe to assume that these locations have seen success over the past year, because during the first week of 2020, CVS CEO Larry Merlo said that the company plans to open 600 more HealthHUBs by the end of the year. Merlo noted “the acceptance, the interest that is growing with our clients,” as something the company is excited about in terms of expanding the program. He also said that the plan will be to update around 12 stores per week and have 1,500 CVS locations functioning as HealthHUBs by the end of 2021. The overall goal for CVS is to become a “health-care destination,” and its plans to expand its HealthHUB locations seems like the right next step to make that possible.
Pier 1 to Close Hundreds of Stores
Although countless stores will be getting their start in 2020, others will struggle to stay afloat and close their doors, and Pier 1 has been added to that list. The company recently announced that it will be closing 450 stores, which is nearly half of its total store count. This move is expected to impact thousands of employees, and comes after years of decreasing sales and struggles for the retailer. The company’s decline has been partly attributed to other retailers like Walmart and Wayfair serving Pier 1’s target market – critics of Pier 1 have noted that the company has not excelled in distinguishing itself from its competition. Pier 1 CEO Robert Riesbeck stated that the store closures are a “necessary business decision,” and it has also been reported that the company will be letting go of around 40% of its headquarters staff. This news aligns with the report that the company would be filing for bankruptcy in the near future, which has not yet been confirmed by Pier 1. Riesbeck also stated that the store closures would allow the company to “move forward with an appropriately sized store footprint and operating structure as an omni-channel retailer, and better position Pier 1 to meet our customers where they shop.”
As we enter into a new decade (some people will argue that the new decade actually doesn’t start until 1/1/2021) – we see more of the same in retail – change. Some is good, some not so good – but at least it’s consistent. The story on Pier One is not new – too many stores, servicing too few shoppers in a competitive market where they have simply not stood out in the crowd.
Amazon is being Amazon – attempting to stay ahead of the curve and serve its customer base. With years of data to call on they see an opening in the premium side of things, and an opportunity to leverage that data, as well as the demise of many in the apparel side of retail. This is another strike of brilliance – but one thing I would keep an eye out for is how returns may impact this business.
The CVS news is no news to SPAR – we have been serving CVS as a client for nearly 20 years, and our teams are entrenched in these new HealthHUB builds. It is an exciting time to be working for CVS and we value the partnership.
Achieve Your 2020 Retail Goals With SPAR
At SPAR, we want to share your excitement about the new year and all the possibilities that are to come for your store. We are experts in retail merchandising with years of experience in the field, and we are proud to offer services that include assembly and installation, merchandising solutions, programmatic services, store sets and remodels, and more. We consider each store we work with a true partner, and we would love to add your store to the list. What are you waiting for? Contact us today to learn more about everything we can do for your store in 2020 and beyond – we look forward to working with you!