If you’ve been keeping a close eye on retail industry news, you know that the retail industry hasn’t been doing too hot lately. Chapter 11 bankruptcy has already been filed multiple times this year, and it’s only March. Just to name a few:
The Limited liquidated and closed all their stores, but still remains online.
American Apparel was bought by Gildan Activewear and is closing all their stores.
Gordmans is liquidating and closing all their stores.
Other companies on this list include Wet Seal and Macy’s.
So what’s up with all these bankruptcies? Why are retailers over a century old failing to meet sales goals? The simple answer: technology.
Technology provides people with a fast and easy way to buy without ever leaving our homes. With a click of a button, we can buy anything from a pair of shoes to a brand new set of furniture and see it at our doorstep in the matter of a few days. While traditional brick-and-mortar stores are suffering in the current industry climate, e-commerce sites are showing rapid growth in comparison. Take ASOS for example. The British retailer is performing alarmingly well with a value of 5,800 British pounds per share. That’s more than $7,000 USD.
Another reason why department stores aren’t doing well: consumer spending habits. You’ve probably heard this before, but millennials are spending more money on experiences and less on material goods. Also, we’re choosing to spend our money places where we can get more for less, hence the popularity of Forever 21 and H&M. On the other end of the spectrum, millennials are also concerned about sustainability and would prefer to buy from places they knew practiced sustainable corporate social responsibility.
So, what does the future hold for the retail industry?
Truth is, nobody really knows. Brands like Reformation are testing out new ways to sell their clothing in a brick-and-mortar environment. Innovations are being developed to keep the physical retail environment alive, and this is a good thing. Personally, I hope that physical retail stores find a way to survive. My reasons being as follows:
Social interaction – Humans need social interaction, simple as that. Shopping in a physical retail environment can provide some of this interaction in a way that online shopping cannot.
Job opportunities – Speaking as a retail employee myself, I understand how important the retail industry is to the job sector. Millions of people in the United States are employed by retailers.
Size differentiation – How many of you have ever ordered something online to realize it doesn’t fit you? This problem doesn’t exist in brick-and-mortar stores. Until all brands follow the same standard size system (which is probably never going to happen), we won’t ever know what size we really are.
Consumer satisfaction – Similar to my last point, I enjoy seeing product in person before purchasing it. Specifications and descriptions help, but they’re just not quite the same.
I don’t consider myself a retail expert, but I did want to share this information with you. I don’t know about you, but I’ll definitely be keeping an even closer eye on the news from now on.
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What are your opinions on the state of the retail industry? Where do you think it will go in the future? Let me know in the comments!