Let’s face it: The past 10 years in retail have not been pretty. A variety of economic factors, along with the rise of e-commerce, have led to the closure of thousands of American brick and mortar stores.
Last year, for instance, about 7,000 stores closed while Moody’s reported that 13.5 percent of its retail and apparel portfolio was distressed (compared to 16 percent during the Great Recession). According to Moody’s, retailers are now filing for bankruptcy at a record rate. Last year we saw major brands like Toys R Us, RadioShack, Payless and many others all file for bankruptcy which was very alarming.
Where Is Retail Headed?
Now, some experts are wondering if this is really just the beginning of the “retail apocalypse.”
Here is our take on the matter:
Instead of thinking of this as the end of retail, think of it as the end of an era.
Retail, in other words, isn’t going anywhere. There will always be strong demand for brick and mortar services. It’s difficult to fathom a future where everything is delivered online. People who love to shop will always seek out physical places where they can walk around, sample products and have traditional shopping experiences. There are some experiences that simply cannot be replicated online — even as we continue to see advancements in virtual and augmented reality. We have all had the experience of needing to buy a last-minute gift or item. And during emergencies, it’s always better to have options. Imagine ruining a wedding dress an right before reception and needing to buy another one in less than an hour!
E-Commerce Continues To Grow At Lightning Speed
At the same time, market conditions and consumer preferences are rapidly changing as we move deeper into the digital era. A survival of the fittest, music and video rental scenario is taking place in retail, where tech-savvy and data-driven companies are rising to the top and companies that refuse to change are becoming extinct.
For retailers today, survival today requires having access to real-time communication and transparency with brand influencers, marketing and sales associates and customers as well as a better understanding of how consumers are behaving offline. In the past, for instance, it may have been enough to simply purchase advertising space in a magazine. Now, businesses can embed trackable mCarts into physical print publications to simplify and shorten the purchasing experience.
Retail Isn’t Over; It’s Just Changing — Dramatically
So don’t get dismayed when you hear the words “retail apocalypse.” The truth is that there has never been a better time to be a retailer due to the abundance of innovative digital solutions that are available from companies like Mavatar. Retail isn’t ending — it’s just changing, and for the better.
To learn more about how Mavatar can help your business adapt, click here.