Retailers struggle to adapt to changing consumer habits.
With unemployment low and growth expected to pick up slowly from the first quarter, consumers are not in a bad mood. But it has been a particularly bad year for retailers.
Nine American chains have filed for bankruptcy protection. Stores are closing fast, and nearly 90,000 retail workers have lost their jobs since October.
Experts say the industry’s troubles are just beginning.
“The disruption is unfolding,” said mark Cohen, a former chief executive of sears Canada, who is now in charge of retail research at Columbia business school. “I think the number of closures will continue to accelerate this year through next year.”
It’s not that consumers are more cautious. Spending has increased, but most of the growth has been online. Traditional bricks-and-mortar stores are grappling with a drastic shift in business, in a more web-based way, and trying to reconcile their old business model with a thinner business model.
Mr. Cohen said retailers typically re-evaluate their business after the shopping number on holiday and adjust by closing or redistributing resources. For some big national chains this year, the process will lead to blood washing.
BCBG Max Azria and Radio Shack filed for bankruptcy. Retailers have announced plans to close 3,100 stores by 2017 – more than last year’s total. JC Penney says it will close 138 stores this year. Sears and kmart are planning to close 150 stores and macy’s will close 100 stores.
According to the shopping central committee, the United States has 1,200 shopping centers – the largest number in history. Experts believe that too much real estate is in the retail sector. Mr Cohen says that in addition to the best-performing shopping centre – which accounts for about a third of shopping’s malls – will have to close or find new identities. In fact, many companies are redeveloping, including office space, apartments, gyms or smaller retail Spaces.
“If it’s all over, we don’t know what we’re going to look like when it’s all over,” Cohen said.
At George Washington university, director of the center for real estate and urban analysis Christopher Ryan told NPR’s Robert siegel said, retail is to “experience economy”, including the customers to try and order online store.
“It’s certainly not the end of retail, and retail is always changing,” Leinberger says. “This is a much bigger shift than we did 50 or 60 years ago, the first major shift from the main street of the early 20th century to the main street to the regional mall. Now to the 21st century edition of main street… “.
Matthew Shay, chief executive of the national retail federation, said retail sales had been slow in history. Not today. “The pace of change is different from what we’ve seen,” he said. “Before, things happened to a generation, and now they happen overnight.”
Shay said that demand for Labour in retailing are changing, that is why the trade group launched in January to the laid-off workers to provide certification program, want to be able to at a higher level of retraining. “They’re going to run, they’re going to go to the warehouse, they’re going to run the store, they’re going to go digital,” he said.
(the bureau of labor statistics says 89,000 general merchandise workers have been fired since October, excluding gas, groceries and online sales.)
Chief retail analyst at The NPD Group, a Marshal Cohen said has nothing to do with The Mark Cohen, stores not only compete with rivals, they their own online business was eating into sales, profit margins are thinner.
Retailers such as Bonobos and Warby Parker have started to open stores online as showrooms where consumers can test their products and order online. Admiral Cohen says these showrooms need less space than traditional stores.
The speed of change is different from what we have seen. In the past, it happened to a generation; Now they happen overnight.
Matthew Shay, chief executive of the national retail federation.
Another big change, he says, is that social media has usurped the mall as a place of choice. Malls are trying to offset this by building more restaurants and cinemas to create places where people want to interact.
“We are entering an interesting phase of consumption,” admiral Cohen said. “We are not interested in buying products. What we are doing is building memories.”
Some analysts believe that some people who lose their jobs in the retail sector will be attracted to service growth, such as restaurants. But one of the unions representing some workers said that did not happen.
“It’s not our experience, it’s not what we see,” said Stuart Appelbaum, President of retail, wholesale and department stores.
Future retail jobs may be in a distribution center, but he says the work is often far from the metropolitan areas where the stores are located and requires more skill types than the teller.
“There’s a lot of pressure on retail workers today,” Appelbaum said. “You’re worried about e-commerce, you’re worried about automation, you’re worried that as the store closes, all the retail jobs are being lost.”
Politicians talk about managing unemployment in coal mining and manufacturing. Now, Appelbaum says, it’s time to do the same for retail.