You may wish to call it a revolution or a transformation, the unequivocal truth is that “retail apocalypse” is like a hurricane that is blowing a lot of businesses asunder. Quite a handful of them has been capitulated and gone into extinction.
The two main reasons these businesses were flushed away from the business world are nonchalant attitude and absolute refusal to adapt to new consumer behaviors. The signs that this upheaval will come has been around in the business world for years.
According to the Statista, the fact that the ongoing rise of e-commerce in the United States is hurting brick-and-mortar stores is undisputed. Two corporations that filed for Chapter 11 bankruptcy protection in October 2018, are retail giant Sears and Mattress Firm.
By the end of 2018, Sears is looking to shutter at least 188 stores. The latest list of store closures includes 45 Kmart locations and 18 Sears boxes. Mattress Firm, on the other hand, said it would shutter 200 underperforming locations right away, and look to potentially close 700 stores altogether over the next few months.
Some retailers, however, saw these signs and adapted their business models years ago. These retail chains understand the biggest advantage e-commerce retailers have is their ability to collect and leverage insights into consumer behaviors gained by technological innovations like big data.
They are adopting technology and processes to achieve the same advantage and adapt to today’s retail landscape. Others are slower to adapt and now face an uphill battle to avoid extinction.
The reality is that Big Data is there and e- commerce is the in-thing. Brick-and-mortar retail is not actually dead. According to Market Track, U.S. shoppers still prefer to make most of their purchases in-store especially for big-buck purchases like cars, appliances, and jewelry.
Consumers now expect a more convenient, tailored omnichannel shopping experience, whether they are online or in-store. And anybody who is not ready to adapt must give way to the new trend in marketing.
They expect you to move towards personalized experiences that are tailored to their every day need and there is nothing bad about that. After all, they should be calling the shots, they have the spending power and you should be dancing to their tune.
Gone are the days when you can shove anything you like down their throats. However, it just requires you to make the slightest of changes, you only need to find out what they really want and need and the information you need is there for the grabs.
Data is been churned out every day about your consumers. By the year 2020, about 1.7 megabytes of new information will be created every second for every human being on the planet. But according to a report, less than 0.5 percent of all data is analyzed and used.
But looking at the situation very critically, e-commerce may not be wholly responsible for the much touted retail apocalypse. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms.
Another source of problem in the U. S. is the over-stored suburbs. You shouldn’t be surprised therefore that the debt coming due, along with America’s over-stored suburbs, and the continued gains of online shopping, has all the makings of a disaster.
According to analyst Jay Sole, however, “E-commerce gains do not signal the ‘death of stores.” UBS estimates U.S. retail is a $4.2 trillion industry and out of that roughly 13 percent, or $475 billion, of sales are taking place online. That’s up from 3 percent in 2004, said UBS, which is predicting that if e-commerce sales rise by about 12 percent annually, online transactions will account for 20 percent of total U.S. retail sales by 2022.
While the current market may have been an apocalypse for some chains, the annual State of Retailing Online study from the National Retail Federation (NRF) and Forrester, however, shows that consumers aren’t abandoning retail. Instead, they expect traditional and digital retailing to be intertwined.
The retail apocalypse should actually be seen as a blessing. It’s out to put marketers on their toes. They will be bound to put together teams that truly service clients’ needs in the most efficient manner possible.
Retail shouldn’t be seen as reeling, rather it should be seen as changing, a sort of Darwinism. The ease of online shopping is a call to action that demands the retail industry to create more incentive for people to get off their couches and actually leave their homes.
Any retail that fails to buckle up should await its day of reckoning. If you give people what they want, when, and how they want it, they will be happy.