It’s often said that we live in a world where the largest retailer (Amazon) owns no inventory, the largest taxi service (Uber) owns no vehicles, the largest media companies (Google and Facebook) produce no content, and one of the largest overnight-accommodation services (Airbnb) owns no hotel rooms.
The digital economy’s brutal onslaught of the analog world continues unabated. The news this week is that several more brick-and-mortar retailers are filing for bankruptcy. Payless ShoeSource, The Limited, and Wet Seal are seeking Chapter 11 protection.
These three chains alone will close almost 1,000 stores.
Forbes writes, “Fung Global Retail & Technology estimates that all of the major U.S. store closures announced so far this year total 2,507. That total is just for announcements made in the three months through April 4, 2017, yet it already dwarfs the 1,674 store closures we recorded across major U.S. chains in all of 2016.”
In electronics, RadioShack leads the funeral dirge. In the appliance sector, HH Gregg is the victim. “Apparel, however, is leading the charge out of brick-and-mortar,” writes Forbes. “We calculate that apparel retailers and department stores account for 2,060 (82%) of the 2,507 closures announced so far this year.”
To survive, brick-and-mortar stores will have to offer something online stores can’t. The consensus is that this enticement should be an experience that a customer can’t have online. For example, a kitchen-gadget store can offer cooking classes.
“Many retailers, recognizing the need to offer hands-on, authentic experiences that will draw shoppers into their stores, are adapting their store formats in order to do so,” writes Maria Sicola in a Development Magazine article titled “The Rise of Experiential Retail.”