Keeping up with the latest store closures, emerging tech, and what Amazon is doing could easily be a full-time job. Luckily for you, it’s ours.
This week, we’re looking at the much-discussed Retail Apocalypse. We’re rounding up the latest news on where we stand as of 2019 including:
- The current state of the Retail Apocalypse
- Whether retailers should consider this is a crisis or an opportunity
- And which retailers have managed to thrive in the midst of chaos
Where we stand in 2019: 28 businesses are bordering on bankruptcies
The Retail Apocalypse has been going on since 2010. As we head into the tenth year of retail closings, bankruptcies, and collapses, it doesn’t show signs of letting up. There have been 7,000 store closures so far this year—more than the entirety of 2018—and 16 bankruptcies. In addition, Retail Dive estimates that 28 more retailers could potentially go bankrupt in the next year. This is more than double the amount they estimated in 2017 and 2018. Clearly, it’s still a risky time for retailers.
The 28 businesses in danger of bankruptcy largely fall into the apparel and department stores categories and include J. Crew, Neiman Marcus, and JCPenney. What’s put them there? Too much debt, not enough mall traffic, lack of eCommerce adoption, and increased competition. As Retail Dive notes, the ongoing tariff challenges aren’t helping them out either. But is it really as bad as it seems? Keep reading.
Via Retail Dive
Retail Apocalypse or Retail Renaissance?
There’s no question that retail has been changing over the past ten years and those changes have brought some casualties, catalogs and Radio Shack among them. But experts are now questioning whether or not we should really be calling this period of change an "apocalypse." A new report from the IHL Group asserts that what we’re going through is less of an all-out crisis and more of a renaissance: A period of radical retail transformation.
The closures we hear so much about are concentrated to a relatively small number of stores, “just 20 companies represent 75% of all net closings in the report for 2019.” And in 2019, more stores are being opened than are being closed—for every company closing stores, 3.7 are opening them.
A lot of these new stores have some significant differences from their predecessors though:
- Smaller format: Huge, sprawling department stores are a thing of the past. Many modern stores are instead opting for showroom models or smaller square footage in their stores.
- Investments in store technology: IHL found that modern retail leaders invest 70% more than the average retailer on technology for their stores.
- An integrated online/in-store strategy: It’s no longer one or the other, today’s stores are supported by an online strategy and a seamless omnichannel experience.
- Logistics that work: In an age when you can get anything you want at any time, out-of-stock issues won’t fly. Successful retailers need logistics that can support their customer experience.
So, while we can certainly say retail has changed, it's definitely not dead.
Via IHL Group
Winners of the Retail Apocalypse
As many retailers have fallen, others have found ways to adapt and thrive. It goes without saying that Amazon has been hugely successful, but it’s not the only one.
Target and Walmart have both remained major retail players, investing heavily in their eCommerce strategies, customer experience, and logistics to remain competitive. In fact, Target had its best sales in a decade in 2018 and even saw an increase in foot traffic to its stores. While Walmart saw 40% online sales growth in 2019.
Smaller, digitally native brands like Everlane and Reformation have also found success—leaning on sustainable practices and radical transparency to cultivate their fanbases.
The moral of the story is, there are ways to remain successful as a retailer in 2019. They just look a little different than they did 10-15 years ago.
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