2020’s Big Fashion Trend: Bankruptcy. Will Your Store Be the Next to Close?

J.C. Penney. Century 21. Lord & Taylor. Men’s Wearhouse. New York & Co. Stein Mart. Forever 21. Brooks Brothers. Sears. 

These are just a few of the fashion brands that have filed for bankruptcy this year.

Bankruptcy is fashion’s biggest trend for 2020.

These chains have closed dozens—or even hundreds—of stores around the country since January. Some have even shut their doors everywhere, for good. 

Is your store next on the list?

Clothiers aren’t the only ones struggling. Other major retailers who have filed for bankruptcy this year include:

GNC. Papyrus. Pier 1. Tuesday Morning. Sur La Table. Modell’s.

You can prevent your own retail chain from suffering the same fate by making a few strategic moves to increase customer acquisition and retention. It’s possible—even in this turbulent economy. Your customers still have basic needs to fulfill, and they also crave stress relief. We’ve seen that people are still shopping, especially online, within whatever spending limits they can manage. 

People are still shopping for comfort, relaxation, and necessity.

However, those with less disposable income might be seeking bargains and sticking to a budget. That’s why they will be more resistant than ever to barriers like shipping fees. If your store is still charging extraneous fees, and making customers jump through hurdles to complete a purchase, it could be costing you big time.

Right now, you need to make it as easy as possible for customers to complete their purchase before their attention strays. This is the time for one-click shopping, easy pay options, auto checkout, fast delivery, and free shipping.

Because it doesn’t matter how much effort you put into attracting someone to your store if you can’t keep them there. According to Ravi Dhar, director of Yale’s Center for Customer Insights, even the appeal of a good discount (like 20% off) can’t compete with the dissatisfaction from an unwarranted fee (like $20 for expedited shipping). That’s true even if the 20% is worth more than $20 (for example, a $200 monitor, where the $40 savings should be pretty enticing). It’s the nature of human psychology to balk when they get to a barrier at the last leg of their shopping spree, rather than reflect on the great deal that brought them there. The first thing today’s savvy shoppers are going to do is spend a few minutes browsing to see if they can find a better deal somewhere else. And with worldwide competition, targeted ads, and deal sites, there’s a good chance they’ll spot something else they like elsewhere. Or they’ll just change their mind; maybe they don’t need that new monitor right now, after all. Maybe they’ll wait for a holiday sale.

If the only way to get what they wanted were to pay a fee, then you could just keep on charging whatever the competitive market rate was for shipping costs. However, plenty of places have abolished shipping fees—and shoppers don’t even need to meet a minimum shopping cart limit.

Plus, Amazon has upended customer expectations by not only eliminating fees for Amazon Prime customers...they’ll also get their order within two days. In some cases, they’ll get their orders via next-day shipping—for free.

This is something that you’ll want to consider offering, as well, if you want to compete. It’s the ultimate goal for thriving retailers who put customer retention first.

Obviously, it sounds like a difficult proposition. You’d be worried about losing money by eliminating those fees that apply to most orders. You don’t want to pay for shipping on every single order out of pocket. But you should be more worried about losing the orders altogether—and losing those customers forever. 

It’s time to think about lifetime value...but not just your brand’s ongoing relationship with its customers, also the lifespan of your brand.

If you want to keep yourself off this bankruptcy list—which is projected to keep growing as we enter 2021—then you need to figure out how you can eliminate fees. Plus, you’ll need to provide rapid shipping without cutting into your own profits. This might require rethinking some of your internal strategy and reorganizing some of your distribution channels. But it can be done.

Your company might be open to partnering with experts who already have a lead on solutions in this area and can provide insights.

For example, BigLynx has developed a method to help retailers re-route their products from local distributors so that inventory reaches customers more quickly, rather than relying on supply to ship directly from warehouses or primary store locations. However, your solution might require heavier reliance on your storefronts, and re-stocking those stores as needed. 

Additionally, partnering with last-mile delivery operators through reliable software streams that are already synced to your records (updating stock, tracking finances, reporting updates in real-time) can help you get packages to their final destination faster and cheaper than relying on long-haul transit companies.

These end-to-end solutions are customized to suit your business model.

By permanently eliminating those annoying shipping fees, we can actually help you keep your doors open—and even turn a profit.

Because while bankruptcy might be trending right now, success is always in style.

Keep yourself off the bankruptcy and closure list in 2021. Find out how with BigLynx.

#retail #fashion #bankruptcy #closures #fastshipping #freeshipping #twodayshipping #distribution #delivery #LTV #BigLynx