With debilitating competition coming from companies such as Amazon, Walmart or Costco, retail stores are struggling. There were 16 chains that filed bankruptcy in the US in 2018 and 50 more did it the previous year.
Why retail is dying?
There is a new shift in the retail industry from the mall and physical stores to online purchasing on smartphones and tablets. As large chain stores struggle to keep up their sales, there is a rise in online sales, independent and artisan retailers. They are stepping up to take their place on the high/main street.
It is common for big brands to announce job cuts, bankruptcy filings. A renowned luxury fashion brand announces deep job cuts. A multinational shoe retailer has filed for bankruptcy protection. Another store chain, once the biggest name in retail confirms that its future it can be in danger.
This trend has been named as the “retail apocalypse” and is one of the biggest the business world has seen. This is not only due to technological innovations but also due to the death of malls across different countries, not only the US.
Is there still hope for retailers?
Despite the bad news we still have hope. Companies like Nordstrom, Walmart and Dick’s Sporting goods plan to open stores. They are fighting against the odds and work to reimagine the customer experience. Their strategy is to cut down cost, minimize labour and infrastructure costs while offering a wide breadth of products.
Other retail stores are experimenting with experiential retailing to provide a more engaging brand experience for customers. In a similar direction, others are re-examining their loyalty programs to bring back customers to their shops.
What is more important, many retailers are investing in technology to provide unique experiences that are not possible to provide in brick-and-mortar stores. Thes initiatives include virtual reality, apps and e-commerce store. This trend is common in the sports retail industry, where companies such as Adidas launched its own app available in more than 25 countries. And as their CEO confirms “there is no doubt e-commerce and e-commerce through a mobile environment is the future of our company”.
How eCommerce changed consumer retailing?
Consumer shopping habits are changing drastically thanks to the explosion of eCommerce,
… and online shopping is quickly becoming the preferred way to shop for consumers around the globe. Here are a few innovations that allowed this change to happen:
The rise of mobile shopping has blurred the line between the physical store and the online experience. Consumers use mobile for different reasons during the sale cycle:
To discover new products
- To locate products and compare prices
- To create and manage shopping lists
- To make purchases
- To review purchases
Customers expect a seamless shopping experience that is customized to their shopping preferences.
But more important, according to Accenture’s 2018 Pulse Check research, more than 90% of consumers are more likely to shop with brands that recognize them and personalize the experience.
Digital marketing transformed shopping into a Social Activity.
Consumers today rely on the opinions of others to guide their purchase decisions, and they have immediate access to those reviews. Anyone on social media can be an influencer for a brand.
As a conclusion, the shift to e-commerce is imperative since eCommerce gives customers immediate access to information, ability to shop on different devices and the option to share their experiences on social media, which has completely altered their expectations and the way they shop.