It seems like every week’s news cycle brings bad news followed by more bad news for the world of retail. Last week the U.S. Census Bureau announced that retail sales fell in March 2017, the second consecutive month of decline.
Since the beginning of the year, ten national retailers, most recently Payless ShoeSource, have filed for Chapter 11 bankruptcy protection. CNBC reports the retail industry is headed toward its highest annual bankruptcy tally since the Great Recession.
Bloomberg reports that upwards of 10 percent of U.S. retail space, or nearly 1 billion square feet, may need to be closed, converted to other uses or renegotiated for lower rent. It further estimates that 8,640 stores will close in 2017, 40% higher than at it previous peak in 2008 when 6,200 were shuttered.
Business Insider recently reported, “Thousands of mall-based stores are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.” It proclaimed, “The retail apocalypse has officially descended on America.”
So we asked our readers whether it is ‘Apocalypse Now’ for retail or if it is coming. The consensus: ‘Retail Apocalyse’ is too strong a word, but retail sure is in trouble. On the positive side, a significant number have a survival plan.
They see the decline of mass-market retailers creating exciting opportunities for retailers with new and innovative ideas. Specialty stores on ‘Main Street’ will thrive by providing the personal touch that shoppers can’t get online. In all ~200 survey results were received, with the largest sample drawn from retail.
Here are the results:
And here is what you said…
Internet shopping is killing retailers
Commenting on the reasons why retail is in such trouble, many point the finger at Amazon and other e-tailers as the culprits:
- The acceptance to order a greater variety of goods online is the greatest challenge facing brick and mortar retailers. We are well beyond the first casualties.
- Internet shopping is killing retailers.
Many of the current store closures have been years in the making from chains that have been slow to adapt to the “Amazon Effect”
Too many national retailers either ignored Amazon’s potential or didn’t act fast enough to overcome its threat. Thus the sad state of retail we see today:
- Many of the current store closures have been years in the making from chains that have been slow to adapt to the “Amazon Effect.” They failed to create either a competing e-commerce business model or a compelling in-store shopping experience.
Online (and mobile) is the driver & successful physical retail is forcing the change from “a local warehouse of products” into a purposeful “experience destination” visit
The real estate industry takes some of the blame, as well, building too much too fast. Retailers can’t just sell stuff anymore, they must provide other kind of experiences:
- We are in the transition to what’s next. We overbuilt during the 90’s & early ’00, encouraged by REITs. The perceptual transition [in shopper behavior] was in play & could be dismissed because the real estate could still provide income. …Now the investment money is gone & the full brunt of consumer behavioral shifts is apparent to everyone. Online (and mobile) is the driver & successful physical retail is forcing the change from “a local warehouse of products” into a purposeful “experience destination” visit.
If stores make shopping fun and engaging, as well as take time to understand the client’s journey from awareness to post-purchase, they will be back on the way to profitability
But many see opportunities arising from the restructuring of the retail economy, particularly for retailers with innovative ideas of how to deliver new shopping experiences:
- It’s more like a course correction [than an apocalypse] where creativity will be rewarded. People love to shop and they love to connect with others. When was the last time you went into a retail store and experienced these two criteria? If stores make shopping fun and engaging as well as take time to understand the client’s journey from awareness to post-purchase, they will be back on the way to profitability.
The age of the big box retailer is over, but innovative specialty retailers will rise from the ashes
- Amazon has completely flipped retail on its head. Customer service + convenience + selection can’t be beat, except when it comes to providing something of unique value. The age of the big box retailer is over, but innovative specialty retailers will rise from the ashes.
People are tired of the sterile and homogeneous environments that malls provide but they still love the charm of “Main Street,” perhaps more than before
The current retail environment will mean a renaissance on ‘Main Street,’ with the personal touch that people crave:
- I find that people are tired of the sterile and homogeneous environments that malls provide but they still love the charm of “Main Street,” perhaps more than before.
If you are selling nothing but discounted price and no personal service, you have lost the game!
The secret of success in the ‘Age of Amazon,’ as in every other retail age, is to remain focused on the customer.
- The big stores have had too many “deals” and “discounts,” so that there was never a day when regular pricing was the norm. So now they are losing to the internet because if you are selling nothing but discounted price and no personal service, you have lost the game! As a small retailer, we aim to carry goods that are NOT readily available in the department stores and we work daily on being friendly and welcoming….customers are our future!
As legendary retailer John Wanamaker said, “When a customer enters my store, forget me. He is king!”