Malls were once the center of many people’s lives, but things are far different for retailers today. More than 3,000 stores are expected to close this year, including massive retailers such as Sears, Macy’s and Radio Shack. Magnetic CEO James Green’s June Marketing Land column breaks down the attack on brick-and-mortar retail into 3 parts:
Movie attendance is down and is expected to fall by 3.5 percent this year. Why? Consumers are consuming entertainment at home. Since movie theatres used to be the anchor tenant of malls, there is a domino effect impacting retailers.
Years ago, Apple and the Disney Store pioneered the trend of selling directly to their consumers. Increasingly brands have followed this trend and those that have opened the direct to consumer channel successfully. Retailers such as Zara and American Giant have reaped benefits in sales and brand loyalty. The industry has seen a dramatic change — stores are smaller and brand centric as opposed to brand aggregators.
Everyone wants instant gratification. Fewer people are buying at physical locations and have shifted to shopping online on sites such as Amazon. Today, 40% of all US households have Amazon Prime and they are concentrated in the higher income household, which are the people that kept malls alive.
What does all this mean? If you want to survive in retail, you need to understand how to make the shift from physical store to ecommerce and have a plan to ensure the growth of online sales. Once you make the shift, you are in a whole new retail world, a world where you better be online and you better be selling your own brand.
Want to learn more about the drastic shakeup of the retail industry? Check out our latest webinar, Elephants in the Room.
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