It’s clear to see that the internet has changed how we shop in recent years. It has made it easier for customers to buy their items without needing to be in store. But can retail stores fight back?
It comes as no surprise that in recent times retail stores sales are declining, this is mainly due to the success of online shopping in recent years. 2018 has been a very difficult year for retail stores. Many stored have experienced fall in foot traffic causing several stores to close. Retail stores are struggling to make a profit, on the 13th September John Lewis announced that their profit had plummeted by 90% in 6 months. This maybe is due to several reasons but it could be argued that online stores such as Amazon are having a great effect on this.
This is not only happening to John Lewis, but other retailers have also reported a loss in profits. Companies such as Fenwick, Debenhams and H&M have all reporter loses in 2018. House of Fraser has in fact reported one of the biggest loses. They are currently closing three of its 59 stores after being bought out by Sports Direct, while another 31 stores had been listed for closure.
The fight back.
In America retail stores that have had a lot to lose due to the success of Amazon are starting to fight back. In recent times they are each staring to show great signs of improvement. It’s been reported that American companies such as Walmart, Macy’s and several others have reported an increase in sales. Just how have they managed to fight off the threat they are facing?
- Going Online.
- Sales and promotions
- Better customer service
- Downsizing and regrouping
Retailers have released the only way to compete with Amazon and others is to go online themselves. In order to be a successful business, they have chosen to have both a physical and online presence. Former Macy’s CEO Terry Lundgren argues that having an online presence in addition to a brick-and-mortar store helps shoppers research where they want to shop before entering a physical store.
Lundgren says that you can see a shift towards online shopping but it is very slow. In fact, in 2017 people chose to shop at physical locations 9 out of 10 which shows growth is not that rapid. By moving online brick-and-mortar stores partly online they can capture the 10% of people starting to shop online.
In-store sales and promotions.
We all love shopping particularly when there sales and promotions going on. Retail stores have been using promotions to clear out stock and attract people to stores for years. Although in recent years retail stores have been using sales to attract people to physical stores. Yes, stores do have sales online as well but in order to encourage people to shop in-store, they have a wider range of offers and better deals.
This is best illustrated during black Friday. On Black Friday you can find deals both online and in store, although in the store you have a greater number of deals. According to Finder, the average adult is expected to drop $483.18 In-store on Black Friday. This shows that people are spending loads in-store on when the right deals and promotions are placed.
Downsizing and regrouping.
In recent times many retail stores are going into bankruptcy forcing them to close down. According to Forbes and CNBC, there is a pretty good chance that the number of store closings this year will exceed the numbers from last year. Some retail stores are “right-sizing” this is the idea that retailers are shrinking their stores in order to keep afloat. They have found that in this changing market they can no longer be spread so thin.
In order to cope with the loss of profit stores such have Macy’s have started closing down branches. In 2017 they shut down 67 stored in the USA alone and early this year they confirmed that they would be closing another 37 more.
Who knows what the future holds.
Online shopping is an ever growing environment and who knows where it will stop. Retail stores have been an important part of shopping for years and I believe will always remain important for years to come. We might see a downsizing of many stores although the main and predominant companies such as Walmart, H&M and so on will always remain. It’s clear to see there is a fight back and that it may well work, although what does the future hold for us?