The Tech Giant Bose has made the bold decision to close all their retail stores in North America, Europe, Australia and Japan. There has been no shortage of opinions on this topic and I was taken aback by the level of interaction when I posted my thoughts on LinkedIn: 

It is critical for Bose to have their own owned and operated stores or to have presence in the big department stores, big box electronic stores and specialist Hi-Fi stores where the footfall is. While I agree that “out of sight, out of mind” will only go to worsen the situation for Bose, making it easier for challenger brands to swoop in to fill the void offline. I’m not convinced they need to maintain their own stores (unless they are performing).  

Don’t get me wrong Brand operate DTC ecommerce is a critical component of the overall path to purchase ecosystem, its only one cog in the digitally influenced sales flywheel. If DTC does its job well, then it does so by leaning on (and leveraging) investments and halo effect of other channels (Both online and offline) versus competing with them. Brands who wish to survive 2020, let alone thrive, need to turn their backs away from inward focussed non cooperative and competing silos within their own four walls. It’s not working! 

Forget online vs offline, let’s get back to serving the customer wherever they wish to be served, through whatever mix of channels that gets the job done, in the least disruptive and most sustainable way for the brand.

You can view here the entire discussion on the post:  https://www.linkedin.com/feed/update/urn:li:activity:6623564602447929344/

There were arguments of equal strength on both sides and all made for interesting reading. John Bruno, ex-Forrester and current VP of Product Management of Elastic Path, said “Bose is not a retailer… As they have also become a software company their digital presence has improved quite a bit; …This is 100% the right move for Bose. Bose does not need retail.” 

On the flip side, Shlomo Chopp, Founder & CEO – ShopFulfill, weighed in with: “This is a drastic and awful decision…. removing a key channel of (Brand) awareness.” 

Brand Performance Expert at ChannelSight, Aditya Labhe, isn’t surprised Bose has made this move: 

Consumer Electronics is one of the strongest performing categories in terms of online shopping and is one of more volume driven – that drives huge volume across the retailer website – it is not surprising that they decided to shut their offline locations.

None of us can know yet which side of the argument will win, we need to wait and see how this plays out.  

We can say that Bose’s decision of closing its stores can come to surprise to many. Many think that is it critical for Bose to have their own owned and operated stores or to have presence in the big department stores, big box electronic stores and specialist Hi-Fi stores where the footfall is. Their space that they once occupied will raise an opportunity for competitors. Brand awareness is the main area in which many feel that Bose will suffer due to this decision. Being present in these stores, and in their own dedicated Bose stores allows customers to experience their product first-hand before future purchase, regardless of where that future purchase took place. Bose have now taken away this experience for their customers.  

On the other side of the argument, it is not always necessary to have a physical presence, especially if a brand has very strong brand awareness in the market already. This move may place Bose as a brand manufacturer rather than a retailer, to John Bruno’s point above.  

The bottom line is that brands need to focus on what their customers want and to serve them in the place they need it the most. Bose has decided that this place is not in their own retail stores. As said by Collette Burke, Bose’s Vice President of Global Sales, “Originally our retail stores gave people a way to experience, test, and talk to us about multi-component, CD and DVD-based home entertainment systems. At the time, it was a radical idea, but we focused on what our customers needed, and where they needed it — and we’re doing the same thing now.” 

At ChannelSight, we have been looking 2020 ecommerce trends, in fact we just recorded a webinar on it – and one of the key trends we are focusing on is – How Online Is Cannibalising the High Street. We have seen many examples of this in 2019 such as Gap, ToysRUs, Walgreens, Forever21. This trend is prevalent in supermarket stores like Marks & Spencer’s who have already closed 44 stores with the aim to move ⅓ of their business online. In 2020 we expect more brands to follow.  

As online continues to take over offline, and companies try to find their place in this highly competitive environment, we will continually see brands sitting back and analysing their company standing, and what lies in store for them.  

I’m looking forward to seeing how this plays out in 2020 with Bose and other brands that follow.