Retail is going through what can be considered a “golden age” as companies adjust to a new consumer connection landscape, “Shark Tank” star and serial entrepreneur Daymond John said on Friday .
Companies like Home Depot are leveraging the Internet to their advantage to thrive, while others that lack the necessary technology are dying, the founder and CEO of the FUBU clothing line told CNBC.
“Retail is changing day by day,” said successful retailers in an “Closing Bell”
The need for experiential purchases, he said, can be illustrated by the rise in stock prices of online commerce companies Amazon and Shopify, the latter whose stock price has recently risen in the four-digit club.
Shares in Amazon, the e-retail conglomerate, have been growing more than 73% since the beginning of the year and ended Friday’s session at a new high of $ 3,200. Shopify shares, which equip companies with e-commerce tools, rose nearly 160% over the same period, closing the session at 1,031.86, which is within $ 30 of its commercial peak earlier this month. .
The comments come from a wave of retail failures during a pandemic response to the coronavirus that had left the store’s activities limited or closed and consumers locked up at home for months. Some of the most important protections against retail failure have come from Nieman Marcus, J.C. Penney, Pier 1 Imports and J. Crew, among others.
“They’re going to close, they’ll have smaller footprints and they’ll have to change around their model,” said John of companies trying to survive the technology-driven break. “Their model will have to be more than an experience.”
The experiential retail model involves more than marketing products and customers buying goods. Traditional retail is based on the acquisition of new buyers, the growth of current consumers and the more frequent acquisition of repeat customers, said John.
Home Depot was launched into the new retail environment starting in 2018 by investing $ 11 billion in its technology infrastructure to ward off Lowe’s competition and create a web presence to avoid others like Amazon.
The goal is to find customers online, John explained, explaining how a company like Sephora needs to train sellers to track a customer’s buying habits and consult him on future purchases. It contrasted it with FUBU’s heyday, when the product was simply shipped to a department store, such as Macy’s, and the clothing company was unable to document the interests of its customers.
“If your sellers are not now in the transactional mode of making a quick sale, and are in the mode of creating content and a conversion and following you at home and knowing your buying habits, you will be in good shape”, he said John. “But if you’re just thinking of your store as a place of transactions, you won’t be in good shape.”
Disclosure: CNBC owns exclusive off-network cable rights a “Shark Tank, “of which Daymond John is co-host.