Are retail stores going extinct? It’s beginning to look that way due to mass store closing announcements in the last six months. Here are the latest to join the list of retail stores closing in 2016 and 2017.
20 Stores with Closures in 2016-2017
- Office Depot – has closed 400 locations in recent years and is in the process of closing 300 more [1]
- Sports Authority – folding all 460 stores; Dick’s Sporting Goods will buy out some leases [2]
- Abercrombie & Fitch – up to 370 closures [3]
- The Children’s Place – Closed 125 in 2016 and plans to close 200 in 2017 [1]
- Walmart – 269 stores will close, but it also plans to open some 400 stores [4]
- Hancock Fabrics – closing all 255 stores [5]
- Tailored Brands (Men’s Wearhouse/Jos. A. Bank) – 250 store closures [1]
- The Limited – closing all 250 stores [6]
- The Finish Line – closing 150 stores [7]
- American Eagle – in 2014 they launched a 3 year initiative to close up to 150 stores [1]
- Wolverine Worldwide (Stride Rite) – unveiled plans in 2014 to close 140 stores in the next few years [8]
- Chico’s (Chico’s, White House Black Market, and Soma) – will close 120 stores in 2017 [1]
- Aéropostale – closing 113 U.S. stores and 41 Canadian stores [2]
- Macy’s – 3 closures in 2016, 65 in 2017, 30 expected in the next few years [11]
- CVS – planning to shut down 70 locations [7]
- Kmart – 68 closures [2]
- Ralph Lauren – 50 closures [2]
- Kohl’s – 18 closures [11]
- Sears – 10 closures [2]
- JC Penney – 7 closures in 2016, with “a few” being evaluated for future closings [12]
In a Sea of Closures, Amazon Gives the “Go”
Based on this list, you could say the future of retail shopping looks bleak. But in contradiction to the mass bricks-and-mortar closures is the announcement that Amazon is opening more retail store locations. If Amazon’s bookstores don’t put retail stores out of their misery, their brick and mortar grocery stores just might.
These Amazon stores are more convenient than any other retail store. There are no checkout lines, eliminating the obnoxious wait time, especially during the holiday season. Even though it’s not as convenient as shopping from the comfort of your couch wearing slipper socks, it’s still a legitimate threat to other retailers.
Amazon’s first physical bookstore made its debut in Seattle in 2015. There are now two others open, with a total of 8 coming soon. Amazon Books is not much different from a traditional bookstore, except rather than displaying books spine out, book covers are on display. This means less room for inventory than those other retail bookstores. But they select books based on the best reviews and popularity. Under each book is a review card with the Amazon customer rating and a review sample.
Amazon is in the process of opening a grocery store in Seattle. This store is much like the Amazon bookstore model. When you enter the Amazon grocery store, you check in on an app called Amazon Go, grab your items, and leave. Amazon tracks the items you leave with using computer learning and deep technology. The biggest perk is that there are no checkout lines, just like Amazon Books. That means there’s no wait to just buy your groceries and go home. Again, it’s not as convenient as home shopping, but it certainly beats the current grocery experience.
The Impact of Online Research on Retail Stores
Not only are convenience and price a factor in the downfall of bricks and mortar, the availability of information online has had huge sway. Consumers have gotten used to using product reviews as a primary decision-making factor. In many cases, they’re everything. Over 90% of Americans say they read product reviews when making a purchasing decision.
Product reviews are not something retailers should take lightly. Shoppers are mixing online and offline channels to make their final decision via Webrooming (research online, buy offline) and Showrooming (see it offline, research and buy online).
Our question to these retailers who are closing their doors is this: have you made a concerted effort to marry your online sales with your offline sales to understand how the two are intertwined? This is a huge challenge for many retailers because it’s not easy to attribute a sale across multiple channels once the user goes offline. But we challenge them to get this done. Why? Because if you don’t understand how immensely one impacts the other, you might lose out on sales in the online channel – even after closing physical doors.
In conclusion, retail stores as we once knew them may be going extinct, but they’re making room for a whole new kind of brick and mortar retail. It’s time for retailers to innovate for today’s omni-channel shopping experience. What do you think?
Sources
- 8 Retailers that are Closing 100’s of Locations in 2017, AL.com, Leada Gore
- Top retailers that are closing stores in 2016, USA Today, August 11, 2016
- Retailers Brace for 2017, CNBC, December 28, 2016
- Walmart to close 269 stores as it retools fleet, CNBC, January 15, 2016
- All Hancock Fabric Stores will Liquidate, Close, Consumerist, April 1, 2016
- The Limited is closing all 250 of its stores, Washington Post, January 6, 2017
- Why Finish Line is Closing 150 Stores, Washington Post, January 8, 2016
- Wolverine Worldwide to Close About 140 Stores, Wall Street Journal, July 15, 2014
- A giant waver of store closures is about to hit the U.S., Business Insider, December 31, 2016
- Macy’s likely to move forward with store closures, CNBC, January 4, 2017
- See whether your local Kohl’s is shutting down, Business Insider, March 22, 2016
- J.C. Penney’s CEO Admits it Will Close Some Stores, Fortune, January 12, 2017
