Saving Private Retail
July 20, 2016,
At the risk of sounding like the Department of Redundancy Department—and Mark Twain—the reports of the death of physical in-store retailing have been greatly exaggerated.
But it seems to be worth repeating as every month some new suit comes out with another study that predicts the end of conventional retail stores and the large-scale—even total—migration online of the process of purchasing stuff. And it has to stop.
But it is not going to be the only game in town...not by any stretch of the imagination. Physical stores will continue to play a vital role in the process of retailing and if you needed any more proof, let me offer the following examples:
Exhibit A: Just across the river from New York City in the fair state of New Jersey—which has more physical stores in its northern half than any place on the planet—the same people who built the Edmonton Mall and the Mall of America (the biggest malls in Canada and the U.S., respectively) are finishing up a project called American Dream. With more than 500 individual stores and a whole host of attractions, including an indoor ski slope and an amusement park, American Dream is the very definition of physical retailing. (Note to world: please stop using the archaic and utterly ridiculous phrase “brick-and-mortar retailing.”)
Exhibit B: TJX, they of Home Goods, Marshalls and TJ Maxx, is planning an additional 500 Home Goods stores over the next five or so years. That will give it more than 1,000 physical stores.
Exhibit C: An Australian apparel chain called Cotton On currently operates more than 1,400 stores in 18 countries, including about 120 here in the U.S. It recently announced it will nearly double its American operation over the next four years. If any field in retailing seemed overstored, it would certainly be fashion apparel.
Exhibit D: Lots of other existing retailers with stores are planning expansions, from Pirch, the new kitchen and bath store with just a handful of units, to the two big dollar store companies, which literally have tens of thousands of physical locations.
Exhibit E: Just about every major pure-play online retailer has admitted they will be opening stores, or physical entities under other names, in the next five years because they will not be able to reach beyond a certain point without them.
We are in the midst of the greatest revolution in retailing history. But that doesn’t mean there will only be one victor.
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