It’s only a matter of time until malls cease to exist and we all have carpal tunnel from shopping exclusively on our mobile devices, right?
Wrong. While it’s theoretically possible that there might be a time in the future when physical retail locations cease to exist, any such time is decades beyond the lifespan of anyone reading this article.
Although the “retail apocalypse” narrative has taken off in the past few years, the facts behind the headlines might surprise you. Here’s what you really need to know.
1. More retail locations opened than closed in 2017.
Store closings dominated the news in 2017. While you likely read about retailers like Sears, Payless, and Radio Shack each closing hundreds of locations, many chains saw record growth in 2017. Value stores, in particular, had a great year. Dollar General opened almost 1,300 new stores, while competitor Dollar Tree added 650. Overall, 2017 ended with almost 4,000 more net retail locations nationwide than at the beginning of the year.
What’s the lesson? It’s not that Americans aren’t shopping – it’s that they’re shopping differently. Value and convenience rule, which is why 7-Eleven added more than 400 locations last year.
2. Amazon didn’t kill Toys “R” Us.
When Toys “R” Us closed its doors in June to much social media fanfare, many commenters were quick to blame Amazon for the beloved toy retailer’s demise. While it may be a convenient narrative, the truth is a much different story. Toys “R” Us struggled financially for more than a decade. In 2005, its debt was downgraded to junk bond status and the retailer tried – unsuccessfully – to find its footing, experimenting with different product lines and store configurations. Ultimately, the retailer’s massive debt (due in part to expanding too aggressively) kept it from being able to adapt as consumer tastes changed, which caused it to lose its creative point of difference.
Once Walmart and Target began filling their superstores with toys, the idea of a standalone toy store lost its appeal. The mega-chain couldn’t compete on price and chose not to compete on experience. Had the retailer taken on less debt, it could have focused on making Toys “R” Us a destination kids and families would want to go. And it would still be around today – offering something no online retailer (not even Amazon) could replicate in real life.
3. Millennials aren’t anti-mall.
Although Q2 2018 mall vacancies were at the highest level since 2012, it’s not because millennials don’t like the mall. In fact, a 2017 study found that more than half of millennials prefer shopping at retail stores to any other type of purchasing. They’re just bringing a more nuanced – and more informed – style of shopping to the mall.
With more than 70 million millennials in the US, and almost as many Gen Z kids right behind them, marketers must shift their approach to target these important economic giants. Millennials are more likely to do research before purchasing, so it’s critical that retailers create an omnichannel experience, making the transition from screen-to-store seamless. Harnessing data, leveraging reviews, and creating product demos are no longer nice-to-haves – they’re must-haves.
For tips on how to leverage the steps above, and more retail facts that might surprise you, download our free ebook, Surviving the Retail Apocalypse: The Ultimate Guide For Marketers.