One CEO and bestselling author, Grant Cardone, posted an article titled “Retail as You Know It is DEAD.” His only hope was to drive increased customer service in these stores. My feeling is that advice, while good, is likely too little, too late.
Retail has much broader problems. I return to this subject after reading the Washington Post story this week, “The Troubles at the American Mall are Coming to a Boil.” For those who want to cheer for the success of well known brands in this country, it is actually rather depressing. And it’s definitely eye-opening. https://www.washingtonpost.com/news/business/wp/2017/04/05/the-troubles-at-the-american-mall-are-coming-to-a-boil/?utm_term=.70f2fc7f8951
The end of this past week brought the latest employment numbers. The weakest sector? Retail. The National Retail Federation claims that retail employment accounts for as many as one in four jobs in our current labor market. About 30,000 of those jobs went away in March. But don’t blame Trump.
In a single word, the force behind the shifting economic model of purchasing is Amazon! In an NBC News story on the March employment numbers, the case is laid out. “We’re seeing a transition toward e-commerce,” said Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce. “Amazon has really caused a change in the way many people shop.”
So who is paying the price? The Washington Post puts it in perspective. Payless ShoeSource, now in bankruptcy, plans to immediately close almost 10% of their 4,400 stores. The Limited also has gone the bankruptcy route, saying goodbye to all 250 stores. Staples may be putting up a company “For Sale” sign. HHGregg has just announced its intention to close its remaining 220 stores.
Classy retailers are not exempt. In Manhattan, one of the premiere foot-traffic draws is the Ralph Lauren Polo store. Farewell to that, too. Urban Outfitters is struggling, along with Banana Republic and Abercrombie & Fitch—the latter two hiring new management in hopes of a fix.
As for Amazon? The Internet retail giant indicates it will hire 100,000 US workers over 18 months. For a really stark comparison, research from Slice Intelligence notes Amazon captured an amazing 38 percent of all online dollars spent during the holiday season. Best Buy, which was the NEXT closest retailer, was at 3.9 percent.
Another factor is millennial buying patterns. Many of them reject the mass market products found in mall stores. Retail stores gaining momentum include boutique types like Bonobos, Warby Parker, Shinola, and Marine Layer, according to the Post.
Seismic shifts can happen to any industry. Elon Musk intends to sell 500,000 new cars in 2018—none of which consume gas. Telephone booths are almost non-existent. So are more recent VCRs. Even DVDs are facing extinction as people latch on to more digital media. And then there’s those pesky robots.
WARNING! Times change. Nothing stays the same. Markets dive. The “sure things”—aren't.
For the faith-driven, God-seeking soul, we have these words: do not fear. “Fear not” and similar phrases show up in the Bible 200 times! How can this be assured? Because we have The Rock of Salvation.
The prophet Isaiah wrote, “In that day he will be your sure foundation, providing a rich store of salvation, wisdom, and knowledge. The fear of the LORD will be your treasure.” (Isaiah 33:6, NLT)
It’s a timeless message. He is our rich store. Especially in the most troubled of times.
So with that Rock, let’s roll.
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Let’s Talk with Mark Elfstrand can be heard weekdays from 4-6 PM Central. To listen outside the Chicago area, tune to www.1160hope.com for live streaming or podcasts, or download the AM1160 app.