Published: Sept. 9, 2017
http://www.gmtoday.com/news/local_stories/2017/09092017-shopping-in-the-21st-century-not-what-you-think.asp
Report: Retail stores still strong despite online economy
By NICHOLAS DETTMANN
ndettmann@conleynet.com 262-306-5043
Mark Mathews, vice president of research development and
industry analysis for the National Retail Federation, acknowledged ecommerce,
or online shopping, is no doubt a part of consumer shopping habits.
However, he also admitted he was surprised to see retail
brickand- mortar stores remain strong, despite the option of online shopping.
“There clearly is an increase in e-commerce,” Mathews said.
“But there are several things that are driving the notion that retail is dying.
There are misperceptions of what the data says.”
In a report published Aug. 30 on the NRF website, IHL Group,
an international research and advisory firm based in Franklin, Tennessee, said
more than 4,000 brick-and-mortar stores are opening in 2017 than closing among
the big chains. In addition, the report says for every store closing, 2.7
stores are opening.
“I think the e-commerce is a thing; it’s happening,” Mathews
said. “It’s not as big as it’s being made out to be. The store is still
relevant.”
IHL’s report says it projects more than 5,500 stores will
open than close in 2018.
IHL’s research reviewed more than 1,800 retail chains with
more than 50 U.S. stores in 10 retail segments.
Here is some other data the research revealed:
■ 42
percent of retailers have a net increase in stores, only 15 percent have a net
decrease and 43 percent report no change.
■ The
three fastest growing core retail segments are mass merchandisers such as
off-price retailers and dollar stores (plus 1,905), convenience stores (plus
1,700) and grocery retailers (plus 674).
■
Specialty apparel retailers are seeing the largest dips in closings with a net
loss of more than 3,100 stores. However, for every chain closing stores, 1.3
chains are opening new stores.
■ When
it comes to chains shutting down stores, only 16 chains account for 48.5
percent of the total number of closing. Five of those chains — Radio Shack, Payless Shoesource, Rue21, Ascena Retail and
Sears Holdings — represent 28.1 percent of the
total stores closing.
■
Retail sales are up $121.5 billion through the end of July.
“Without question, retail is undergoing fundamental
changes,” said Greg Buzek, president of IHL
Group, in a news release. “However, retailers that are
focusing on the customer experience, investing in better training of associates
and integrating IT systems across channels will continue to succeed.”
Mathews agreed and added, “You see a lot of innovation.
We’re not sure how it’s going to play out yet.”
And that is the key for retailers going forward in the 21st
century: innovate.
“The thing I always say is the balance of power has shifted
in the last decade from retailer to consumer,” Mathews said. “It used to be you
had to go a certain place. Now, everything is in the hands of the consumer to
do what they want and when they want. Retailers have to adapt.”
And consumers are seeing it.
Meijer, for example, which opened a store in West Bend
earlier this year, has a home delivery service called Shipt. It launched about
a year ago and can be found in its stores throughout the Midwest.
“Meijer prides itself on being at the forefront of
technology to better serve our customers, from our MPerks savings app, to our
new partnership with Shipt, allowing customers to place a grocery order to be
delivered right to their doorsteps,” said Art Belt, market director for Meijer
in Wisconsin. “Our motivation was to bring the customers added convenience and
provide another way to shop our stores.”
Mobile apps such as InstaCart offers similar opportunities
for consumers.
“While we know that customers love shopping at Meijer
because of the freshness of our grocery options and wide selection of general
merchandise that provides a one-stop-shopping solution, we also know that they
are looking for low prices and a way to gain back a few hours in their days,”
Belt said.
He added acceptance of online shopping has grown in the last
10 years, which has led to things like Cyber Monday, the Monday after
Thanksgiving.
“Ten years ago, many shoppers were still anxious about
shopping online,” Belt said. “There were security concerns, for instance. But
today, shopping online is really second nature to a significant percentage of
consumers. Customers are growing more and more comfortable with purchasing
everything they need online.
“However, we have found that for many consumers, online
shopping is no substitute for going to a brick-and-mortar store to do their
shopping.
Many customers prefer to do their shopping in-person, to
actually touch, smell, and feel the products they need and want.”
A recent NRF study validates that.
In each of the last five quarters, retailers report more
than 91.5 percent of their sales came from instore purchases.
Mathews said a boom in selfcheckout offerings have not
impacted employment. He also cited the bank teller industry as an example.
“We’ve seen a reduction in tellers in bank branch, but that
allowed banks to open more branches because they felt they needed to still get
out and work with the customer,” Mathews said. “You may have fewer people at
banks, but more banks are open.”
The NRF says employment in retail is growing and has for the
last seven-plus years. In June 2010, more than 11.9 million people were
employed by a retailer, which includes people working in warehouses or
distribution centers. At the beginning of 2017, more than 12.8 million people
were employed by a retailer.
Mathews acknowledged automation has raised some concerns
about employment, but he doesn’t believe the worry should be that high.
Employers are moving around employees and putting more emphasis on other areas.
“We think the future of retail employees is robust,” Mathews
said.
He added, “Retail continues to be strong throughout all this
change. That’s interesting. It seems like there’s all these hurdles. We hear a
lot about malls closing. All the numbers point to positives. Retail sales are
extremely strong. That keeps surprising us.”
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