As a society, our perception of retail has changed. The industry scene has evolved to a point where online retail and brick-and-mortar retail are not completely separate business categories. Instead of lamenting the loss of “the way things used to be,” traditional retailers must recognize that the reality of e-commerce today is one they can handle. While e-commerce will most definitely be part of the big picture going forward, it isn’t going to cause the demise of the retail industry as a whole.
In a feature article for the November–December 2017 issue of LP Magazine, Walter E. Palmer, CFI, CPP, CFE, PCG Solutions, explores the reality of retail and how the market share of e-commerce today needs to be kept in perspective as one considers the latest data and research. From the article:
A recent report from the IHL Group, Debunking the Retail Apocalypse: Retail’s Real Story, was promoted by the National Retail Federation as a nice anecdote to the current narrative being played out in the media. The IHL report concludes that there will be a net increase in store openings in 2017 of over 4,000 stores.
While the headlines focus on the struggles of the department store sector or the bankruptcies of iconic chains such as Toys“R”Us, these do not reflect the overall market. For every RadioShack, there is a Dollar General. For every The Limited, there is a Five Below. For every Wet Seal, there is a TJ Maxx.
Broken down by brand, 751 brands are increasing their store counts versus 278 that are reducing their store counts. Perhaps this is an indication of the normal life cycle of this business that we are in.
Palmer examines projections for the 2017 holiday shopping season and provides some food for thought regarding the so-called “disruptive” companies in retail. Check out “Searching for Reality in Retail” to read the full article.