The Washington Post has a story about the rash of store closures that seems to be afflicting US retailing, which seems to be a result of both generally stagnant sales in many bricks-and-mortar stores and the move of many consumers to online shoppers.
With some exceptions, the story says, there is general agreement in both retailing and real estate that the nation is "overstored," and that this is a situation which which more and more companies have to grapple, especially "as shopping and demographic patterns change ... the retail landscape is changing, as individual retailers rethink their store portfolios. The pullback has many shopping center owners looking more broadly for tenants, targeting restaurants, health clubs and other so-called lifestyle businesses."
While the nation may be largely "overstored," the story says, the reality is that there is less retail square footage per person than there has ever been, and the trend is unlikely to reverse itself: "Indeed, it seems that the rise of online shopping has fundamentally changed what it means for a retailer to give up a store. Now, such a move might fairly viewed as playing offense rather than defense, a proactive choice to move toward a more digital-centric future instead of a worrisome retreat."
Shutting stores and devoting energy and money to online sales isn't the only approach. Advertising Age has a story about how some retailers - like Staples, Samsung and Bonobos, for example - are changing the nature of some of their stores to adapt to new realities. "This means a retail outlet that in the past would have been designed solely to drive purchases in the moment can now function entirely as a brand advertisement," the story says. "These concept stores allow customers to test products, interact with associates and, ideally, better understand the ethos of the brand. With real estate costs at a premium in key urban areas, the sites also allow a retailer to better use every square foot and not waste precious space on on-site stockrooms."
With some exceptions, the story says, there is general agreement in both retailing and real estate that the nation is "overstored," and that this is a situation which which more and more companies have to grapple, especially "as shopping and demographic patterns change ... the retail landscape is changing, as individual retailers rethink their store portfolios. The pullback has many shopping center owners looking more broadly for tenants, targeting restaurants, health clubs and other so-called lifestyle businesses."
While the nation may be largely "overstored," the story says, the reality is that there is less retail square footage per person than there has ever been, and the trend is unlikely to reverse itself: "Indeed, it seems that the rise of online shopping has fundamentally changed what it means for a retailer to give up a store. Now, such a move might fairly viewed as playing offense rather than defense, a proactive choice to move toward a more digital-centric future instead of a worrisome retreat."
Shutting stores and devoting energy and money to online sales isn't the only approach. Advertising Age has a story about how some retailers - like Staples, Samsung and Bonobos, for example - are changing the nature of some of their stores to adapt to new realities. "This means a retail outlet that in the past would have been designed solely to drive purchases in the moment can now function entirely as a brand advertisement," the story says. "These concept stores allow customers to test products, interact with associates and, ideally, better understand the ethos of the brand. With real estate costs at a premium in key urban areas, the sites also allow a retailer to better use every square foot and not waste precious space on on-site stockrooms."
- KC's View:
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I have to admit that I find myself more and more walking into stores and seeing the wasted space ... I see the square footage that does not have to be consumer-facing, and the differentiated departments that could be expanded in a way that would make the stores more competitive and more distinct. The solutions won't be the same for everyone, nor should they be ... but I think retailers have to be using this new prism to decide how stores and developed and defined.
