The pressure is mounting for brick-and-mortar retailers to turn themselves around and gain back comparable store sales as more consumers turn to online buying.
Macy's (M) - Get Report , Kohl's (KSS) - Get Report and Sears (SHLD) are just a few of the major retailers to have recently reported a sharp decline in comparable store sales. In November and December, Macy's and Kohl's same-store sales fell 2.1%, while Sears' comparable store sales have dipped by as much as 12%.
In order to drive customers back into stores, individual retail locations need to offer items unique to their respective surrounding communities - items that are personal and that cannot be duplicated on e-commerce platforms, said Logan Rodriguez, Director of Retail at solutions services agency Square Root. Rodriguez previously held several executive positions at Macy's including New York Corporate Manager.
At Square Root, Rodriguez helps retailers identify issues and tackle them. What he found to be the greatest problem facing top retailers is poor Store Relationship Management, "SRM," which is essentially the lack of communication between location store associates and executives at the corporate level.
He said that "communication is broken," and if fixed, retailers may actually be able to drive consumers back into their brick-and-mortar shops.
"How we're listening to our customer base in actual locations is really important," Rodriguez said.
Only 37% of store managers feel they have the needed guidance from corporate to succeed and only 36% feel they have an appropriate communication system to reach the corporate level, according to Square Root research.
"Do [corporate executives] really understand what the people are looking for in, say, Albuquerque?" Rodriguez asked.
While retailers must focus on building a strong e-commerce platform in this changing consumer environment, they also have to drive unique, location-based items only found in stores, he said.
For the first time this year, online shopping holiday Cyber Monday outpaced Black Friday in revenue. In November, Cyber Monday sales generated $3.39 billion while Black Friday reeled in $3.34 billion in revenue, according to a study conducted by Adobe(ADBE) - Get Report .
Still, Rodriguez anticipates that retailers can boost their same-store sales in 2017 and beyond with the simple act of improving communication with location store associates.
(Adobe is held in Jim Cramer's Action Alerts PLUS portfolio and Kohl's is held in Premium Products. See all of the holdings with a free trial.)