Stores are forced to evolve if they hope to remain relevant in the current business market.
According to analysts’ predictions, more mall retailers are expected to close following Macy’s announcement which started the year on a rather grim note. 40 Macy stores will be closed, with two of them being one of the oldest in the US, and will more than likely not stop only at these.
This is all in accordance with the current consumer behavior which has been shifting over the past few years, with regular brick-and-mortar retailers suffering from the same impact. Simply put, more and more people are opting to do their shopping in the online medium instead of going to malls or shopping centers. According to the numbers released by the National Retail Federation, over 30% of the US citizen population opted to do their shopping online from the comfort of their homes during the holiday season.
Stores have always been under the heavy influence of consumer wants and needs, shifting their location and their business practices accordingly. For instance, in the 1950s, every major retailer opted to construct their stores in the suburbs, slowly moving inward towards city centers. Shopping malls, although encompassing several companies within themselves were also extremely reliant on one big department store.
But this eventually became a thing of the past, as consumer behavior waxed and waned with every year that passed. It seems that malls are suffering from the same effects, making the chance that they will also become relics of the past highly likely if one would take into account analysts’ beliefs.
Besides Macy’s, another powerhouse from the department store side of the market that also is encountering several issues in regards to consumer demand is Nordstrom. Lower traffic in stores due to online retailers, fewer shopping sprees, as well as intense competition from companies like H&M, are making Nordstrom severely consider their following actions. Its stock fell almost by a half in comparison to last year, dropping by 42%, a fact that might trigger the closing of several locations, just like Macy’s.
Sears is also getting attacked from all sides, with Home Depot having much more favorable prices for home appliance items, Target taking the fashion side of the market and Amazon basically attacking all sides of the spectrum. In addition, most consumers feel like the catalog-based company has rather uninspiring and unexciting stores, leading to a massive decrease in consumer numbers. Fortunately for the company, its endeavor in the real-estate market has somewhat cushioned the blows of its competitors, allowing Sears to maintain itself afloat. Even so, its shares have still dropped by nearly a half over the past two years, without showing any signs of stopping in the near future.
Although more mall retailers are expected to close following Macy’s announcement, the general public will not be extremely affected by this change, bearing in mind that this stems from the evolution of their consumer behavior. Department stores are simply feeling the backlash of this switch in gears towards the online side of the market, a fact that forces them to evolve as well or just remain remnants of the past.
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