As eCommerce continues to grow, we are seeing a decline of physical footprint of stores for many brands. It has been going on for some time, but seems to be moving to another stage at the moment. At eTail West, we heard from Staples that “with nearly half of our sales generated online today [we] plan to close 2,200 of [our] stores.” Meanwhile, RadioShack plans to close 1,100 of theirs.RadioShack “has also been moving some products from stores to its website, and carrying more private-label goods with higher margins.” Other e-retailers are taking more dramatic steps, like Bonobos and Warby Parker, both of whom are complimenting their online businesses with brick and mortar installations. “We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar,” said Neil Blumenthal, one of Warby Parker’s co-founders.
How Retail Will Change
So what does all of this mean for the retail industry? In our most recent infographic, Brave New World – Evolving Retail in the 21st Century, we saw that 1 in 4, yes – you read that correctly, 25% of the United States job force is supported by the retail industry. And more than 40% of those jobs are non-sales positions.
Mobile Drives Retail Change
You’ve likely heard of “show-rooming” where a shopper visits an item in store, chats with a sales rep and then leaves only to buy the item later (and maybe cheaper) online. Smartphones are acting as the support vehicle for those show-roomers. Between the millennial and the baby boomer generations, millennials will ask for a price match almost 2x as often as baby boomers will. Not to mention, 70% of millennials will read product reviews before completing a purchase, compared to those 40% of baby boomers. And how do they know what the price difference is and what the product reviews say? All of this research is done via smartphone either before or during the store visit.
What Are Retailers Doing About This?
Companies like Walgreens, Sephora, Walmart and Macys are all making big pushes toward conquering this “clicks and bricks” retail experience. For instance, Macys’ uses their stores as a place to pick up orders online. Walmart is using mobile to their advantage by providing information via their app on the locations of products in store. Walgreens, who has really evolved over the past 5 years, uses their online store offers for in-store pick up, site to store delivery and even home delivery options.
What Does This Mean for Retail?
Retail will continue to change, but I don’t believe jobs will be disappearing anytime soon. With reports of over 30% growth in eCommerce, jobs will simply be reallocated, and those who evolve will evolve with the technology and those who don’t will, well, fail.