Retail is Dead! Long live Retail!

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Recent news of multiple store closings has sparked a hot discussion on whether retail as we know it is dead.


– Payless Shoes to file Chapter 11 and close 400

– Macy’s to close 68

– J.C. Penny to close 140

– Sears to close 42

– Kmart to close 108

– The Limited filed Chapter 11 and closed all 250

– Abercrombie & Fitch to close 60

– hhgregg filed Chapter 11 and closed 88

– Crocs to close 160

– Gander Mountain filed Chapter 11 and closed 32


It wasn’t that long ago that most retail prognosticators were still talking about how small online was a percentage of total retail.  When we blogged on this in August 2012, we noted that the tipping point on “Web Influenced” retail sales was 2015.  We added the percentage of online ecommerce to web-influenced retail, then compared it with non-web influenced traditional retail.  It was one of our most read blogs, and we thought it was a big insight.


So how did we get to the “retail is dead” narrative so fast?


It’s a combination of factors.


Demographics favor online retail. Millennials have grown up with ecommerce and will continue to expand their use of it as they age and gain in household income.

Flat wage growth. Even though the recession ended in 2009, real wage growth (factoring in inflation) has been flat.  For many, this has been happening for decades.  This puts pressure on all retail.

Retail space is expensive. The cost of physical retail space places a hurdle on the balance sheets of retailers, compared to online retail.  As department store anchor tenants falter, all traffic to the mall suffers – affecting retailers large and small.

U.S. Retail is due for right-sizing. Investor’s Business Daily reported that U.S. retail square footage per capita is more than six times that in Europe or Japan.  In February, Deutsche Bank estimated that among the retailers it follows, more than 13,000 stores have closed in the last 10 years through 2017.  An additional 6,400+ stores could still be cut in the future.

Some retailers have let themselves become “un-exciting”. Lots of adjectives could be used to describe a lackluster retail environment: boring, confusing, un-helpful.  With racks of items jammed together, un-helpful or overly aggressive sales associates, poor layout and lack of signage… many shopping experiences have become tedious.

Great online retailers continue to up their game. Online retail has grown as predicted, offering ease, simplicity and control of the experience – but savvy online retailers are still innovating. They are increasing convenience, satisfaction and decreasing the risk of returns by using online video (, providing great product images and detail (, and free trials and subscriptions (


What will SMB Retailers need to watch for? 


Small/Medium retailers have weathered the storm since 2008 by being nimble and trying new things.


They were early with experimenting with online media. SMB’s used social media and their websites to reverse a trend in local advertising – running more promotions and promoting them online for less advertising money.   As more consumers search locally for products and services, promoting your events and business online is critical.


Don’t be boring.  In a world where you can buy almost anything online, a retail experience needs to offer something more.  Walk into a Costco store on any weekend day and it’s buzzing with free tastings and product demonstrations that set it apart from other superstores.  They also sell tons of cars and vacations, which are always exciting.


Stand for something.  Warby Parker sells eyewear and has many retail outlets, but apart from a great online presence, it’s best known for distributing more than two million eyeglasses to those in need.  They donate one for each one you purchase, so you feel good too.  They also have a free trial offer that makes it easy to pick the right frames, risk free.


Be more helpful.  Having recently purchased a blue blazer from a local men’s store, I was grateful for the advice from the sales associate who suggested that a particular label runs small, so I might go up one size.  I ended up buying that item and others, though I would never have done that online.  I spent more, but was happy with my purchases.


Integrate your experience.  Here are some tips:  If your brand is “fun”, it should be the same online and in the store.  Store associates should know everything promoted online. If you text coupon offers, those coupons should be available to use from a smartphone at checkout.  Arm your sales associates with iPads to help customers – showing the latest product demonstration video from your website, or looking up product specs.  Your POS database should recognize customers’ online and offline purchases, so you know your Most Valuable Customers.


Above all, don’t be fooled by the “retail is dead” narrative.  Stay nimble.  Keep experimenting.  Make it fun, educational or both.  Offer value beyond the basic transaction…which you’re seeing can easily be had online.



  1. Majority of Sales will be “Web-Influenced” in 2015;
  2. 15 big retailers closing hundreds of stores in 2017;
  3. Are Retail Stocks Doomed? Shorting Potential Abounds, But Hope Remains;
  4. Video;



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