Store closings of major retailers are often read as a sign of hard times, but L2’s 2015 Omnichannel Retail study finds most of the latest store closings can be tracked to digital leaders. An analysis of brands the top and bottom 40th percentiles of the Omnichannel Index revealed that the laggards closed on average 2.82% of their stores, whereas the leaders closed 4.00%. However, the result of these closings differed for the groups. Eighty-nine percent of the leaders reported positive same-store sales growth in the recent fiscal year vs. just 50% of the laggards.
The reason is that the omnichannel leaders have optimized their digital assets to give consumers information, images and selling points that will drive them to the store. No longer relying on foot traffic to be the first inspiration for a purchase, the leaders are doubling down on omnichannel and e-commerce fulfillment. They are offering the convenience of having a store nearby by offering click-and-collect and same-day delivery, and making full use of a smaller retail footprint.
In fact, many brands with ambitious real estate growth plans lag in digital capabilities: T.J. Maxx, Burlington, and Ross plan to open more than 25 additional stores each. And all are ranked Feeble or close to Feeble in L2’s Digital IQ Index: Big Box.