The dangerous news for the retail trade is coming back quick and furious lately. massive names ar shuttering stores or going out of business.
Add it all up and quite a pair of,880 retail stores are closed this year to this point, a pace that’s running prior to a similar purpose throughout 2008’s recession, consistent with a recent Bloomberg report. What’s worse is that the longer term isn’t wanting any brighter.
The “bubble has now burst,” Urban Outfitters Chief Executive Richard Hayne told analysts. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
One factor is, not surprisingly, Amazon. The online giant has taken away significant sales from malls and chain stores. (Amazon.com Chief Executive Jeffrey P. Bezos owns The Washington Post). “The Seattle-based company accounted for 53 percent of e-commerce sales growth last year, with the rest of the industry sharing the remaining 47 percent, according to EMarketer Inc.,” Bloomberg reports. But there’s another thing going on: too many stores have been built and that’s caused an overall glut in retail space. The U.S. has far more square footage devoted to retail per capita than any other country – six times the amount of our European and Japanese counterparts.
But take heart, small retailers. “Class A malls” are thriving and research shows that customers still prefer to shop in physical stores 75 percent of the time. Big retailers have more overhead and are slower to make significant changes than their smaller counterparts. Main Street merchants that supply a good client service expertise – each in their store, over mobile and on-line – have lots of opportunities to thrive.
It’s all regarding focalization on your customers, believes one retail analyst. “Management has to be fixated on speed of delivery, speed of offer chain, and be ready to take a look at scan and react to new and rising trends,” he told Bloomberg.