Store 3.0 is Duluth-based Maurices

NEW YORK – Did you know that Store 3.0, the next-generation retailer that seamlessly combines old-fashioned physical stores with websites, mobile devices and social media, is located in Duluth?
Neither did I.

Here at the National Retail Federation's annual conference, retailers are pondering a rather existential dilemma: how to position brick-and-mortar stores in an increasingly Internet-driven future.

"We have new retail rules," said Alison Paul, vice chairman and U.S. retail & distribution leader at consulting firm Deloitte. "The store is not dead. Stores have become a part of a much more complex ecosystem."

Rare is the store that can strike a harmonious balance between physical and digital.

But they apparently do exist. To prove it, the NRF trotted out David Jaffe, CEO of Ascena Retail Group Inc., which owns Dress Barn, Justice, and Duluth-based Maurices. Jaffe spoke warmly of Maurices, a women's retailer that caters primarily to shopping malls and small towns. Founded in 1931, Maurices boasts 750 stores in 44 states.

While Maurices may operate in small-town America, the chain is a decidedly 21st-century retailer, one that is especially fond of social media.

To celebrate the launch of its partnership with designer Christopher Straub from "Project Runway," Maurices recently threw a coming-out party at the Mall of America streamed live on YouTube and featured real-time Twitter feeds on a large screen.

Today, traditional stores account for 91 percent of all retail sales, according to Deloitte. Five years from now, that number will shrink to 63 percent. For retailers, the obvious strategy is to grow both physical and online stores. Easier said than done.

Some retailers, like Target Corp., excel at running stores but are still working to develop the same pattern of success when it comes to online retailing. Others such as Best Buy fare better with new technologies, but their physical stores suffer from the perception they are merely "showrooms" for online merchandise.

At Maurices, the company created what it calls Hometown Sound, a contest that allows customers to vote via a special website for promising bands that will perform at the South by Southwest music festival. This year, the retailer will host a pop-up store at the festival.

Maurices also asked customers through social media to identify people from small towns who could model its clothing. At the same time, the retailer has invested in its physical stores, designing more appealing dressing rooms and developing an electronic loyalty card called Take 10.

"We don't care if [customers] go online or to the store," Jaffe said. "Our best customers will do both. It's not either/or. It's and, and, and."

Thomas Lee • 612-673-4113