The digital shift continued to show its dramatic potential to change retailing today, as three companies announced major changes to their business models. No less than Sam’s Club, Starbucks and fashion high-flyer Zara have made adjustments to online ordering and purchasing.
Zara’s announcement was the most dramatic. The Spanish company’s owner Inditex SA is permanently closing as many as 1,200 stores — 16 percent of its global outlets — and will focus instead on its eCommerce business. The closures will take place this year and next and affect as many as 100 of Inditex’s stores in the Americas. The announcement comes after Inditex saw a 95 percent surge in online sales for the month of April alone.
“The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day,” said CEO Pablo Isla.
Zara was not among the retailers seen to be at risk from the pandemic, so the move was something of a surprise. It is indicative of the adjustments the retail industry can expect to see as consumers shift their buying preferences to digital experiences.
“As many of the world’s major economies start to reopen, global retailers like Inditex are throwing open the doors to their stores again, hoping demand and foot traffic will return,” said The Wall Street Journal. “But for many big players, including department-store chains and fast-fashion retailers, the pandemic only punctuated a yearslong reckoning brought about by a boom in online shopping. Inditex, a family-controlled chain that many analysts and investors see as having entered the crisis on a stronger footing, is one of the first big retailers to outline how it sees the industry’s future amid a tentative reopening. The answer: fewer stores and a more concerted push online.”
The changes from Starbucks and Sam’s Club were also unexpected. Sam’s Club announced the nationwide launch of its curbside pickup service, which will be limited to its premium Plus-level members and is expected to be available in all clubs by the end of June. The Walmart warehouse club brand has been piloting curbside pickup at 16 clubs.
“Sam’s Club members have been integrating technology into their shopping habits for a while with Scan & Go, samsclub.com and in-club pickup,” said Sam’s Club Chief Operating Officer Lance de la Rosa. “As we continue to innovate to make the shopping experience better and faster for our members, we’re proud to be able to quickly implement and offer curbside pickup across the country, particularly during a time when they are searching for alternative ways to shop.”
Starbucks has announced it will be closing about 400 company-owned locations, though USA Today reports that the plan is to open an additional 300 new stores by the end of the year. The brand has about 15,000 U.S. locations, around 60 percent of which are company-operated. The brand will be placing further emphasis on to-go, pickup, and delivery orders.
“As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers,” Starbucks CEO Kevin Johnson said in a statement.
Specifically, the company wrote, “Over the next 18 months, Starbucks will increase convenience-led formats in company-operated locations with drive-thru and curbside pickup options, as well as Starbucks Pickup locations.” These “Pickup” stores are a new format for customers to use Mobile Order & Pay in the Starbucks app so they can grab their order and go. The brand says that these kinds of locations will be expanded “in dense markets including New York City, Chicago, Seattle and San Francisco.”