This Is Not Target’s New Shopping Cart: Here’s Why It Should Be
Talk about the death of retail is great click bait. Media outlets from the Wall Street Journal to Fortune to USA Today have trumpeted news about store closings, retail bankruptcies, and the end of retail as we know it. If we’re to believe these articles, we’ll all be buying from Amazon.com, and malls will become old age homes for Baby Boomers. And the rest of us should just close up shop now, and put an end to the pain.
The only trouble with these stories is … they’re baloney. They serve to frighten the industry, allow retail observers to pontificate endlessly, and give “everyman” a new slow-moving train wreck to watch. And they don’t do much more than that.
Photographer: Marianne Armshaw/Bloomberg News.
Following are five reasons, in no particular order, that shatter the notion that “retail is reeling.”
No. 1 – Retail sales in the first quarter 2017 increased 4.1% over first quarter 2016. As my friend Greg Buzek of IHL points out, retail has a very cyclical sales cycle. Comparing sales to a month immediately preceding it is nonsense. Think about it. Can we compare November to December, for example? Of course we can’t. One is the slow period right before Black Friday, and the other is the heat of the holiday season. If we look at those numbers, we’d think retailers are blowing the doors off. Ironically, in 2016, Easter fell in March vs. April in 2017, so by rights, we should have seen a year over year dampening effect in Q1. We didn’t. Retail isn’t reeling. Some retailers are. Others are doing just fine, thank you.
No. 2 – Most of the chains closing stores have seen their problems build over decades. An infographic published on LinkedIn helpfully gave some examples of retailers closing stores. The list is instructive.
- Sears and Kmart – Two chains (one holding company) that have struggled to find their identities for more than a decade, and who have been run by someone with no retailing experience at all are closing stores. Are we surprised?
- RadioShack – Seriously? I’m sort of shocked it even got the opportunity for another go-round. Why should that chain exist anymore?
- Various specialty apparel retailers – In this list the infographic includes Rue21, The Limited, Wet Seal, Bebe and American Apparel. While American Apparel has its own unique issues, the others are struggling against the emergence of Fast Fashion. Quite simply, their market is shrinking. We could argue that they over-expanded in the first place, but none of these make me gasp and say “oh my, the sky is falling.” They just simply didn’t keep up with changing times and tastes. Others are taking their place.
- JC Penney – This is a chain that has come back from the dead and a series of missteps that almost killed it off completely. Clearly the world has changed. JCP isn’t as relevant as it used to be, and its customer is aging out of the market. Shrinking the chain is a good idea, and ultimately should help it become more profitable.
- Macy’s – I’m going to give some real…