Online Shopping Stealing the Storefront
It’s no secret that online shopping has become increasingly more popular over the past couple of years; but exactly how much more popular? According to Business Insider, “The NRF [(National Retail Federation)] expects that online retail will grow 8-12%, up to three times higher than the growth rate of the wider industry.” This gradual increase is having a huge effect on many major companies who are being forced to close several, many, or even all of their stores due to poor financial standings or bankruptcy. Huge brands like BCBG Max Azria and American Apparel are closing 120 and 104 stores respectively due to their financial circumstances. Bebe, a once immensely popular store in the 2000’s, announced earlier this month that they will be switching to an entirely digital platform after the closure of their 170 stores at the end of May.
Other brands are not taking such drastic measures yet are clearly focusing on their online presence. Ralph Lauren has developed the “Way Forward Plan” to improve their online capabilities however, this comes at a cost. They have chosen to close their flagship POLO store and transfer its inventory to their other New York locations. Forbes recently comprised a list of twenty-one retailers, including JCPenney and Macy’s, who plan to or have already closed many of their physical locations in 2017, although there may be others. However, no need to panic. Although the amount of closings may be shocking, brick-and-mortar stores still make up the majority of the retail industry; 89% of all retail sales are still made at physical locations. That may sound promising but this subdivision “is expected to grow at just 2.8%, slower than the average rate of growth for the overall industry” (BI Intelligence). Storefronts might not be doomed just yet, but who knows what the future may bring.