The death knell has been sounding for retail for decades. First, it was when shopping malls were being developed and it was deemed that “High Street” retail was doomed. Then, Wal Mart began expanding across the countryside and that spelled the end of main street and local retail forever. Next, “Outlet Shopping” was going to ruin the malls and decimate traffic. Most recently, the internet was going to destroy retail as we know it and make bricks and mortar stores irrelevant. Not so fast.
For one, I am tired of the exaggerated and sensationalized headlines describing the state of retail. Any industry matures and adjusts to the winds of change. Is retail immune to upheaval? Heck, no.
I am not denying that the above events and others (including the iconic Sears catalog to name one more) have caused pain and disruption, especially to the smallest of retailers in the smallest of towns. But facts are facts…
- According to the latest US Census figures, from 2004 through 2014, annual US retail sales climbed from $2.35 Trillion to $3.19 Trillion
- In 2015, E-commerce grew 14.6% climbing to almost 10% of all retail sales
- Every year, around January or February, retail bankruptcies are announced and this year is no exception (Limited Stores, American Apparel and previously announced Sports Authority, Wet Seal and Aeropostale – now reincarnated 300 store lighter)
- Department stores are undergoing the most disruptive era in their existence (at least since merger mania of the 80’s)
- Pure play online retailers such as Warby Parker and Bonobos are opening bricks and mortar stores
- Online consumers spend 93% more when they have physical stores in which to shop
- Physical store customers spend 208% more when they have an online store win which to shop. (Both facts from Accenture Consumer Study, 2016)
The most stunning statistic of all is the fact that even if e-commerce doubled in market share over the coming years (and we concede that Amazon continues to take 50% of that growth), there would still be 80% of sales coming from “traditional” physical retail establishments. Physical retail stores (along with most of the shopping malls), contrary to what is being reported, are not disappearing. They do have to be re-imagined, however.
Change? Yes. Upheaval? Yes. Turmoil? Yes. Transformation? Yes. Rationalization? Yes.
Death? No. Please stop reporting “Fake News” on the death of physical retail.