Retail: is bricks and mortar dying or just changing?

Used to be, when the doors opened on Black Friday, heading to that big doorbuster item was like running with the bull in Pamplona. This year? I slept in a little, got a decent parking spot and made some small talk with a few shoppers as I strolled to the shoe department.
It’s just not like the old days.
Why?

Retail is dying. Online shopping will eventually drive malls to extinction.

About 80 percent of the country’s 1,200 malls have 10 percent vacancy. And, 15 percent have between 10 and 40 percent vacancy. We know it intuitively: the malls are just not as packed as they used to be, back when kids hung out by the fountains to toss a coin and parents paused at the clearance table in Walden Books.

Department stores—once the anchor stores that lured shoppers into malls— no longer feel relevant, with their huge selection of styles that don’t all speak to me. H&M, JCrew, and even Target seem easier to predict and to navigate.

In the 70’s and 80’s we built mega malls that shuttered mom and pop stores.

Now, we’re shuttering those same brick behemoths.

online is on the rise while bricks and mortar is declining

Online shopping represents about 10 percent of our overall retail purchases. It’s projected that by 2030, that number will be as much as 30 percent.

two-thirds of Americans have smart phones

Nearly 40% of sales on Black Friday were made through a mobile device, most of which were cell phones, which is a 10% increase from last year.

Read more here: Mobile eCommerce Stats (OuterBox)

But let’s look at Pew Research for some fascinating insight into the retail debate. The trends kind of surprised me.

According to their 2016 poll, about 10% of retail purchases, excluding cars and fuel, are made online from the 79% of Americans who shop this way. Got it.

BUT..

65% of online shoppers indicate that, when given the choice, they generally prefer to buy from physical locations.

AND…

65% of online shoppers indicate that if they needed to make a purchase they would probably compare the price they could get online with the price they could get from physical stores and choose whichever one offered them the best deal.

With those numbers in hand, let’s look at the other side of the debate.

Retail is changing, not dying. Online shopping will not take over.

price still guides our purchases

even if we have a smart phone. Pew Research reports 62% of shoppers have used their phones while inside a store to look up online reviews or to check for lower prices.

and online sales are not necessarily profitable for businesses

Read more here:

The Inconvenient Truth about eCommerce (Forbes)

Online Shopping Isn’t as Profitable as You Think (Harvard Bus. Review)

plus online sales can result in retail stores competing for their own customers

In other words, customers use online JCrew instead of brick and mortar JCrew, which means the stores show fewer sales.

Read more here: How 36 Major Retailers Fight for eCommerce (Forbes)

we currently spend about the same amount of time shopping as we did in 2001

The Bureau of Labor Statistics looked at time spent shopping in their Time Use Survey from the years 2003-2015.

The results: In 2003 the average American shopping .81 hours per day. In 2015, the average American spent .75 hours per day shopping. Which means we’re not really saving a ton of time by shopping online, which means that might not be the motivator.

maybe we’re relaxing in showrooms instead of traditional inventory-stocked stores

Bonobos, a trendy mens clothing store, uses showrooms to help customers make choices—some even offering beer to make the experience more pleasant –then they ship purchases to the customer’s home. No more endless inventory that gets reshuffled at the end of each season.

They are still “stores.” They’re just reinvented.

while retail struggles, there’s been a growth in gyms, in alternative gym-like activities like rock climbing, and in healthy fast food, like anything served in a bowl.

These are showing up in space that was previously occupied by retail, and have become the draw for customers looking for experiences rather than simply purchases.

 

Back to the News Made Simple article here.

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