Savvy investors are aware of the seismic shifts gripping the retail sector. The growing dominance of online shopping, led by Amazon, has caused a rapid decline in the business of retailers like The Gap (NYSE: GPS). Gap is not alone in this predicament, of course, and its path to turning things around provides a good case study of how to tackle the challenges. Here are three things for investors to watch when it comes to assessing if Gap is on the right path.
Research shows shoppers do not want to shop exclusively online. They want options. Hence, the rise of the omnichannel retailing concept, through which retailers offer customers various avenues to arrive at the purchase point. This includes both online and in-store shopping experiences. A study by the Harvard Business Review shows this approach not only works, it boosts customer loyalty, in-store spending, and purchase amounts per transaction.
That's why the online-only companies, including Amazon, are now looking to build an offline presence. It also helps explain the resurgence of retailers like Walmart, which is building its online presence and uses its stores to outmaneuver digital-only competition in areas like grocery shopping.
Source Fool.com