What Goes Around Comes Around – The Finest Authentic Luxury Vintage Handbags, Jewelry & Accessories for Men & Women
Sneakers can now be considered luxury goods. When LVMH is investing in resale that can’t be argued.
While this post isn’t about sneakers directly, indirectly the situation that Dillard’s is in is comparable to The Sports Authority and their bankruptcy and the impending issues with big stores in the sneaker industry. Dillard’s is simply too big. When Barney’s has to file bankruptcy it’s a sign that every big box store will have to make serious adjustments. This year Dillard’s has closed/will close three anchor locations, “In addition to the closure in North Carolina, the company has announced that a store at Oakwood Mall in Enid, Okla., will close around the end of the year. Also, a Dillard’s store will close Aug. 3 at the Mall of the Bluffs in Council Bluffs, Iowa, where it had been an anchor store since 1988.”
Big box stores are antiquated in their approach to retail. I’ve been stating over the last five years that a transition to smaller spaces would create more effective retail experiences. With stores like Barney’s or Dillard’s it’s extremely difficult to reduce the square footage, but it has to be done because the price of commercial real estate is soaring. I visited a Dillard’s recently and the parking lot was empty. The store was empty, but it wasn’t because of poor customer service. The employees in the store were helpful and knowledgeable. I actually bought a North Face bag. It’s the exact opposite of some smaller stores, which shows that my use of generalizations can be problematic. There isn’t a consistent situation to approach a discussion on retail with. There has to be a general statement to introduce the problem and then store chains have to look at individual situations. The Dillard’s I visited did everything right, but it was still empty. During my visit I discovered that there was a “store in a store” experience featuring luxury consignment brand What Goes Around Comes Around.
10 Reasons Why The RealReal IPO and StockX’s Unicorn Status Happened
Recently a comparable shop to WGACA IPO’d and I attempted to explain why third party businesses were gaining these exorbitant valuations and how they are capable of being added to the stock market. When The Real Real IPO’d the business hadn’t made any money yet it gained a valuation of 300 Million dollars. Both The Real Real and StockX are new concepts based on digital and what can be considered an Amazon profile. Amazon generates half of its sales from third party sellers. Both The Real Real and StockX work on the consignment model. Carrying inventory isn’t necessary to generate revenue. Dillard’s has partnered with WGACA in an attempt to drive engagement, but the irony is Dillard’s has been in partnership with the consignment shop since 2017. I had no idea that this store inside of a store was available at Dillard’s. The marketing around the concept isn’t very strong and while the display is eye-catching in comparison to other items in the store the price is prohibitive. What it does is give Dillard’s a way to possibly add new consumers, but it’s also research for WGACA.
Here is the beauty of being small vs the problems with size. WGACA can recognize if the market is strong for Dillard’s in theory they could decide to take on a smaller location in the same space and end their relationship with Dillard’s. This is highly unlikely, but I write this as an example of how quickly smaller stores can adjust. What I really want to address is an option and solution for stores like Dillard’s, Macy’s and Nordstrom’s.
Here is a hypothetical. It would probably never happen, but it could. The mall where this Dillard’s is located has numerous open locations. The anchor is large and I’m sure the mall would rather large spaces be filled, but what if each division of Dillard’s was opened in smaller shops throughout the mall? Right now a store the size of Dillard’s is paying around 80,000 per month. 10 smaller locations within the same mall would reduce the overhead for the company to around 20,000 dollars at 2,000 per store. Those smaller store concepts would allow for better interaction and speed for customers and retailers. The WGACA Dillard’s store would be it’s own stand alone unit and wouldn’t have to compete with lower priced handbags.
What am I saying here? I’m attempting to play around with an idea for the problems malls are facing. Anchor stores have to be filled because once the anchor stores are gone, the only stores left are typically sneaker stores. If malls took those anchors and offered them multiple locations inside and gave big box stores regions within the mall, think about how that would look. Dillard’s could have a Men’s store, Women’s store, A make up store and other segments could be broken down. This is important because the biggest issue with anchors right now is the sheer size is overwhelming and shoppers are now operating on an online model. Shoppers want streamlined, more personalized shopping options.
This is all hypothetical and will probably never happen, but on the back of Macy’s disappointing quarterly report where an analyst at Forbes stated that a similar strategy to Dillard’s x WGACA was troublesome because it wasn’t truly innovative, maybe this hypothetical should really be considered. From Forbes, “Macy’s management has placed so much emphasis on Story, now featuring outdoor merchandise with the help of Dick’s Sporting Goods, and on Thredup, a resale merchandise effort that has about 500 square feet in 40 stores.” The ‘store within a store’ concept is common in sneaker stores, but the reality is it’s Nike dominated and a reliance on a company that’s growing digital as fast as Nike is, isn’t really a strategy as it forces the store to rely on one brand instead of creating true ‘store in store’ experiences to elevate all brands. If ‘store in store’ isn’t working in smaller sneaker stores the What Goes Around Comes Around concept probably isn’t going to be as effective as it could be and is only a placeholder for a better idea. The small store concept is my better idea.
Additional notes:
Mall owner Simon Property Group on Wednesday said it’s considering more opportunities where it would invest in a retailer to help keep it afloat.
Just about three years ago, Simon and mall owner General Growth Properties, which is now owned by Brookfield Property Partners, teamed up to rescue embattled teen apparel retailer Aeropostale. The two were part of a group that ultimately won an auction to buy the Aeropostale brand out of bankruptcy court, salvaging its real estate. At the time, Simon had about 160 Aeropostale stores in its portfolio, while GGP had 77. A total liquidation would have left them with more than 200 empty shops.
Could we see Mall Owners begin investing in startups and legacy brands? If this is happening, it doesn’t make my idea that far-fetched.