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If you have heard of Forever 21 filing for bankruptcy, then chances are you know of its wider implications.
In 2019, we saw the dawn of the phenomena dubbed as the “retail apocalypse.” It had been dubbed as such because of the staggering rate of brick-and-mortar retail store closures that shocked the retail industry, dating back to the past couple of years. This retail apocalypse spared not even the once retail giants in the industry.
When the dust has settled, we are left to count the casualties affected by the phenomena, and what it means for the future of retail moving forward.
The Numbers
102 million square feet of store space was closed by retailers back in 2017, and this record was broken just the year after with 155 million square feet being closed in 2018. According to the Business Insider , retailers have announced more than 9,100 store closures already this year.
Payless ShoeSource filed for bankruptcy back in February and planned to close all of its 2,500 stores. It was referred to as the largest retail liquidation in history. Another big name in retail was Gap announcing in the same month that they would close 230 namesake stores in the coming two years. It cites store sales dropping by 7% over the holiday season. Forever 21 said that they expect to close 350 of their stores globally, with 172 of them located in the U.S. after filing for bankruptcy. Famous U.S. department store chain Sears also planned on closing 175 stores in their round of store closures. Not exempted is women’s lingerie brand Victoria’s Secret closing 23 stores due to a decline in their performance.
What They Really Mean
For some, the retail apocalypse can mean that physical retail is dead, but that is not the case.
It might be easy to say that eCommerce is what’s killing physical retail, but it couldn’t be more wrong either.
While eCommerce is growing faster than physical retail , analysts believe that it only accounts for under 15% of total retail sales. There might be a ceiling when it comes to eCommerce after all as online shoppers still find having nearby physical stores just as important when buying online. Physical stores will never go away as a younger generation of consumers who like to shop online but buy in-store. This has been a new strategy of traditional retailers such as Walmart in the U.S., to catch up to online-only companies introduced the shop online, pick up in-store models.
The moral lesson of the story is not so much that sticking to tradition is wrong, but more so the importance of being able to adapt to the changing trends. In a rapidly changing industry with new technological innovations every so often, it is the rule of survival.
The retail apocalypse perhaps may have been branded wrong. It doesn’t mean it is the end of something completely, but rather a sign of the times that we are approaching a new normal. When the dust settles in this apocalypse, what is left is not just rubble but a new place to start. When before the only way to get your brand out there was to open a physical store, these days opening an online channel essentially fills the same purpose. With some companies experimenting with strategy and introducing new models, it showed that one foot in the digital scene is enough to sustain a business.
We believe that it shouldn’t be difficult or costly to get your brand out there online. Whether you’re a new business owner looking to start creating your own page or looking to expand your market by having an online presence, then iRepublic is your best partner. A digital agency that offers affordable websites and digital marketing services, iRepublic can help boost your brand online and help you keep up with the ever-evolving market. Let us help you reach your customers online! You can drop us an email at info@irepublic.ph or get in touch with our team by dropping a form at https://www.irepublic.ph/contact.