A retail apocalypse may be upon us, but it appears to be limited to big-box chain stores.
According to an analysis by small-business advisor FitSmallBusiness, reports of the death of brick-and-mortar are greatly exaggerated when it comes to independent dealers.
No doubt storefronts are shuttering at an accelerating pace, with the number of year-to-date closures already greater than all those reported from 2003 to 2006 combined. And with about $70 billion worth of retail leases set to expire next year, 2018 may bring more of the same.
Nonetheless, big-box chains represent roughly half of this year’s retail bankruptcies, FitSmallBusiness said, while Forbes pointed out that amid the retail implosion, 3,000 new shops have opened so far this year.
Indeed, the view from Main Street remains rosy, with independent dealers accounting for more than 72 percent of retail sales growth in 2014 and 2015. What’s more, about 40 percent of consumers said they planned to shop local for Holiday 2016 — no doubt led by millennials.
Even the threat of online competition may be overstated. FitSmallBusiness reported that 62 percent of consumers choose in-store over online shopping because they want to see, touch, feel and demo products, and that 90 percent of all retail journeys still end in-store, even if they begin online.
Source: Retail Dive
Viewed in a larger context, e-commerce comprised less than 8 percent of total retail sales last year, the U.S. Commerce Department found.
To help keep the independent channel competitive, FitSmallBusiness urged dealers to provide prompt, personalized and VIP-like service within their showrooms, and to offer extra amenities like areas where customers can eat, drink, read or charge their phones.
“The retail industry is not dying but is going through a huge transformation catalyzed by the changing consumer spending habits,” the report concluded. “Small and local businesses are thriving along with discount shops at the expense of big-box stores. E-commerce may be growing at a rapid rate, but its total market share is still too small to pose any real threat to brick-and-mortar stores. The industry is purging the old and the worn out to give way to something new and exciting.”