When three retailers on the same panel can point to the success of their city-center stores, even the blackest pessimist has to sit up and take notice. Nobody can dispute the increasingly important role of online shopping. Yet that is precisely why operating a bricks-and-mortar store is by no means a free pass to carry on doing business in the same way in the past. Nina Müller (Jelmoli), Benjamin Fuest (Breuninger), and André Maeder (KaDeWe Group) all have different areas of focus, but were united in their belief that effective customer retention needs a strong story to drive it, and that store owners must constantly come up with new ideas.
So does this mean a return to the classic marketplace? Well, yes and no. First, the experts on our panel predicted that half of all retail business in Germany will be conducted online by 2030. Second, store operators have to do a whole lot more to entice consumers to their premises than in the past. Our SHIFT panel discussion with these three representatives of flagship stores, all supplying premium products, quickly revealed their recipe for success: everything is connected. The on-site location provides classic sales advice with individual offers, original events, showrooms, and local in-person shopping, combined with online retail. All in all, the ultimate in storytelling.
It’s a complex process, but a step that many people have the drive to take. Take the KaDeWe Group, for example, which has earmarked EUR 600 million for fundamental investments over a seven-year period. Half of this amount comes from the brand partners, explained Maeder, and is a clear indication of a strong belief in a dynamic, vibrant city center retail sector.
Benjamin Fuest presented a similar view, proclaiming that physical presence in the country’s leading pedestrianized city centers is a source of added value. “Our online sales are also good––even in locations where we have our stores”.
Nina Müller, CEO of the venerable Swiss department store Jemoli, is well aware of the standout features of Jemoli’s historical headquarters in Bahnhofstrasse, Zurich. But she too announced the view that “Bahnhofstrasse is undergoing enormous change, and we have to change alongside.” She pointed out that even traditional department stores are allowed to surprise and amaze their customers. But give up the beautiful premises? No way!
The question is whether this successful concept can be applied universally. Do luxury retailers have an edge in this respect? “There are definitely individual stores in Zurich that are developing in new directions. But it isn’t easy; you need the funding, and it’s not something that anyone can do,” admitted Müller. Maeder stressed that it is essential for stores to know their customers and be precisely familiar with their wishes; by using this knowledge as a basis for staging attractive events and campaigns, any store would have the chance to invigorate their own operations, and perhaps even the neighborhood as a whole.
However, good marketing alone is still not enough to ensure success for a city-center store. The surrounding area must also be bustling and vibrant with life in order to attract shoppers. “We have a mission to contribute to urban development,” announced Fuest. And Maeder chimed in by describing the need for meaningful concepts that would revitalize pedestrian areas, and evidenced his views with the fact than KADEWE’s Open Sunday, when all other stores in Berlin were closed, resulted in takings significantly below expectations. The conclusion? Competition brings life to business––and brings businesses to life.