As we are about a third of the way through the year, more retail stores are planning to shut their doors than did throughout all of 2018. In the past, when stores would close their doors, liquidating companies would come in and buy bulk amounts of clothes and store them in a warehouse; their strategy is to wait until interest picked back up and someone wanted to re-open the store with the merchandise. However, nowadays that isn't the case. With the rise of e-commerce, more and more stores find themselves shutting their doors for good and filing for bankruptcy as the number of options that now exist because of online retail has forced them out of the market. Not only does this hurt people within the companies, but it hurts the brand of them as well too which is bad in the long run. Often during these liquidation sales, stores become chaotic and they are unable to get the staff to manage it as no one wants to take a job for a store that won't exist in a month. When this image is seen by the public, it further supports the drive for e-commerce; why get trampled in a store when you can buy something from the comfort of your own home?
But, the closing of these stores is nothing to fear. Rather it's a signal that preferences in shopping are changing. Specifically, it's starting to look like the brick-and-mortar experience could exist to complement the online shopping experience in the future, as companies like Amazon are experimenting with small physical locations.
Moving forward, I am interested to see where the excess of retail employees may go, as there appears to be a strong demand for labor in other sectors. Now it appears to be a question of what sector they will move to. I am also looking forward to how physical retail locations change and adapt to complement e-commerce rather than being a substitute.
SOURCE: https://www.nytimes.com/2019/04/12/business/retail-store-closings.html
5 comments:
Caroline, this is an interesting article because the immediate nature of our generation seems to prefer online shopping. When for most everyday items, its actually faster to just go buy them from a store. My family owned a soccer store for many years and e-commerce had a very large effect on it. People would come in, buy the little things that they didn't want to pay shipping for, they'd try on shoes, and then order them online. Personally, it is backward. If I am somewhere and find a product I like, I almost never price check online (unless its a very pricy item). Advanced education in growing fields will become so important as us college students get out into the job force. It will be interesting to see if a new skill will be developed by these retail workers.
Thanks for sharing this interesting piece! Working in consumer / retail this past summer, it was very interesting to be able to see both sides of the coin - firms that were thriving in retail versus those that were on the brink of bankruptcy. The overarching theme that I noted was that the more technologically advanced stores that had strong online sales and online presence were doing far better than those that were scrambling to keep up. Women's brands that utilize"influencer endorsement" like Revolve have far better returns than the typical clothing brand chain. I think that we can also see this trend with the downfall of malls and other large shopping centers as consumers (especially millennials) save time by shopping online and look for more experiences rather than material goods. Definitely interested to see if these lagging firms can turn their business plans around to remain competitive.
This is a very interesting article. I agree with Antonio, with the rise of online shopping tools such as Amazon and even some online services provided by retail, it seems like we are getting to the point of retail slowly dying off. Our generation especially really utilizes the tools offered by the services such as Amazon, it has gotten to a point where you can ask Alexa, a service of Amazon, to order things for you. It will be interesting to see if the retail market will be able to survive or if they will figure out a way to counter the services offered by the online services.
In my opinion, as more and more retail stores shut down, unemployment rate will increase. If physical stores want to survive, they really need to enhance the experience of offline shopping or create some "new stuff" in their stores to attract customers to go in. I don't think retail will die at all, because people really need it. It is convenient and give you the total different feeling compare to online shopping. As the 1990s and"millennials" are getting old and start to form a family, they will figure out the necessary existence of physical store.
I think Yongzhao has a really interesting point. If more and more retail stores close their books, the unemployment rate could decrease drastically. Companies like Amazon benefit from this immensely because they are able to take advantage of automation in their warehouses, and they gain more and more market share as each store closes. I also agree with what Yongzhao said in regards to retail not dying. People enjoy going out to shop and walking around the stores trying things on. It is apart of the experience for some. However, with the rise of e-commerce and convenience, it will be really interesting to see what stores exist and what eventually close up.
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