If you have been paying any attention to the headlines coming out of the retail industry over the last few months, you may think that off-line retail is going the way of the dinosaur. In the first half of 2016 alone, the industry has been flooded with unfavorable news, such as that poor sales are to blame for the closing of numerous Kmart, Macy’s, Target, Walmart and Sears stores throughout the country. Then there was Nordstrom’s embarrassing stock downgrade. Later, reports came out that Sports Authority and Aéropostale are filing for bankruptcy
Few would argue that the dismal performance of both big box and small, mom-and-pop retailers is not being affected by the growing prevalence and preference for ecommerce. Platforms such as Amazon, eBay, and Paypal, as well as the emergence of mobile technology has forever changed the way we make purchases. But that change need not be a death knell for brick and mortar retailers. In fact, over the past year or so, behind all the doom and gloom, the retail industry has actually been showing some signs of healthy growth and expansion.
According to Douglas Hope, of GlobalShop, in his session at the Microsoft Envision 2016 conference, some corners of the retail industry appear to be going strong. In 2015, retailers spent some $62 billion on in-store “shoppers’ experiences,” and it seems that at least some of this investment is making an impact. Even as several big box retailers began pairing down their operations, retail revenues hit $5 trillion last year- that represents a 72% increase in sales since the year 2000. Plus, there are currently 3.8 million storefronts in the U.S.- which represents an increase of 190,000 within two years. Perhaps the biggest eye-opener of all: about 90% of those storefronts are small, independent shops.
So, what could be driving this resurgence of off-line commerce? The retailers that are expanding in this age of digital commerce tend to have a couple of things in common:
1. They are very focused on providing a good customer experience. For example, consider the case of hunting and sporting goods chain Cabela’s. Stores feature in-door rock climbing, and an in-store cafe, animal and cave exhibits and a wide selection of products. The chain is now building two new 70,000-square-foot retail locations, one in Georgia and one in Missouri.
2. They don’t ignore their digital footprint. Successful retailers today work to seamlessly blend their online presence with their off-line one. In fact, many bring the two together. Some great examples of this in action include: Geo-Targeting and Proximity Marketing as well as in-store virtual dressing rooms.
While it may seem like the sky is falling when it comes to “real world” retail, the industry is going through an evolution and it is one that will likely include physical storefronts for a long time to come. Those who adapt now will be the ones in the best position to survive.