Retail Observer

AUGUST 2018 RETAILOBSERVER.COM 49 that are utilizing retail technology to improve and enhance the in-store shopping experience for their customers. Also fueling the appeal of smaller store formats is the fact that traditional brick-and-mortar retailers have realized that they currently are sitting with too many square feet of floor space for the amount of foot traffic they are getting. "Not enough people are talking seriously about the impact that the changing demographics of the country are having on retail," Lebensburger said. "Baby Boomers represent some 76 million Americans, but by comparison, Generation X consumers only account for some 41 million people. Obviously, those numbers have an impact on retail." Another key factor impacting all sectors of the retail landscape, including home furnishings, is consolidation. With so many businesses being family-run, the founders are aging-out while many of the children are choosing to pursue different careers. Even so, Lebensburger believes the future can and will be bright for independent retailers, who he believes will thrive in small-store formats. To do that, however, they must up their game in terms of using the latest retail technology to offer the customer the best in-store shopping experience possible. As one example, Lebensburger pointed to Wondersign, a device that Ashley introduced in over 1,500 of its stores two years ago. The touch screen device, usually 42 inches in size, allows consumers to look at thousands of items and provides them with accurate pictures, sizes, dimensions and other information they may be interested in. When the independent marries the newest retail technologies — which are becoming increasingly available and affordable—with a well-focused, small-store format, he or she is standing on firm ground, Lebensburger said. When asked to describe the characteristics of these emerging small-footprint retail stores, Lebensburger said he believes they will be a blend of the best of old and new. The new will involve new retail technologies, that will make store owners better informed, better merchants and able to offer an enhanced customer experience. "But even better, the new technology will also help attract younger people who appreciate technology into the retail workforce. And since this has always been a relationship business, having people who are passionate about what they are doing makes this a win-win. When employees love what they are doing, they tend to love their customers," Lebensburger said. Ironically, the new technology will also help bring about a shift back to the best of old-school retail, when people shopped locally. "People are starting to figure out that this business, at its core, is about one-on-one relationships," Lebernsburger said. "Back in the day, if you shopped at a men's clothing store, the owner knew you. Similarly, if you went to the local grocery store, the owner would oftentimes take the items off the shelf for you." To that end, Lebensburger suggests that when you blend the latest technology with some tried-and-tested retail formulas, the industry will see a continued shift to better and smaller stores, specialized stores, and the return of the true merchant. This new hybrid format is also being fueled by online retailers who are taking on characteristics of brick-and-mortar retailers in the form of opening new stores and warehouses. Similarly, brick-and-mortar retailers are upping their game online with better, more functional websites that allow consumers to shop the store and buy on the retailer's website. When asked for a timetable for the industry to see a major proliferation of these smaller-footprint stores, Lebensburger predicted the paradigm shift will occur over the next two to three years. "The technology keeps becoming more available and more affordable, so it is just a matter of time," he said. He also predicted that brick-and-mortar retailers should benefit from these shifts. "While the pure-play online retailers have done a great job capturing where the consumer has been and what he or she puts in a cart, lots of shoppers, especially younger shoppers, are not thrilled about anyone having that much information about their activities." While acknowledging that online retail sales continue to go nowhere but up, Lebensburger also suggested that the web can be somewhat impersonal. He suggests that independent brick-and-mortar retailers can succeed in an online world by capturing many of those metrics but applying them to their models. "Take those metrics and apply them in-store. Brick-and-mortar retailers can have an advantage because people still want to touch and feel the furniture," he said. Lebensburger acknowledged that due to large cash infusions from venture capitalists, the big retail entities will undoubtedly continue to get bigger. "But at the same time, the smaller stores can and will be able to offer shopping experiences that can be fun and more affordable." E. Michael Allen, VP of Furniture and Bedding, AVB/BrandSource RO

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