Despite vacant malls and bankrupt retailers, it may be too soon to declare the death of the physical store, with some retailers successfully overhauling themselves in the era of Amazon.com.
According to a report in The New York Times, the efforts appear to be paying off, with revenue growing at some retailers as the economy keeps expanding. Consumers flush with cash are spending more, including in physical stores. What’s more, stores that have learned how to provide ease of shopping and instant gratification that Amazon.com made so popular are also doing well. Those that have failed to embrace eCommerce and evolve along with the market are closer to bankruptcy. “The retailers that get it recognize that Amazon has forever changed consumer behavior,” said Barbara Kahn, a marketing professor and former director of the retailing center at the Wharton School in the New York Times report. “I shouldn’t have to work to shop.”
The report pointed to Target, Nordstrom and Walmart as retailers that get it, and as a result, are seeing sales increase. Target, for one example, allows shoppers to make an order on a mobile device and pick up it in the parking lot, while Nordstrom customers can drop off returns in a box without having to deal with a sales clerk. Walmart is hiring personal shoppers that will select groceries and provide them to customers curbside.
While not all retailers are doing well, the pace of store closing is slowing — most of the unprofitable stores have already gone under or have been shuttered. By September of last year, close to 5,700 stores had closed — but so far it’s 4,480 this year, reported the New York Times, citing data from Coresight Research. “There has been a shakeout, and 2017 was seen as the bottom,” Melina Cordero, head of retail research for the Americas at the real estate firm CBRE, told the NYT.
Target is among the retailers that is aggressively overhauling its stores to give customers what they want, including the ability to order online and pick up at the store or have purchases delivered to their homes in some cases in the same day. Target also raised the starting salaries of employees to keep retention high and increase morale among workers. The paper noted the efforts on the retailers come as the strong economy is giving them the cash to make the renovations — but if there is any economic weakness, it could hurt the progress of the past few quarters.