Charlotte Russe, Payless ShoeSource, Forever 21, A’gaci and Z Gallery are just a few of the many stores that have filed for bankruptcy in 2019.
Brick and mortar stores are slowly starting to be eliminated. What would life be like if all we had was the internet to send everything right to our door? That means you can’t try on any clothes before finding the perfect fit and can’t feel the fabrics to make sure they are comfortable. Then there’s the extra fees for shipping and returns on items that might be sent back anyways. On top of that, thousands of jobs will be lost. If stores keep on the same path they have been on, this could be the future of shopping.
According to Coresight Research, this year in the U.S. there have been only 3,000 store openings and 7,062 store closures. Coresight predicts that by the end of the year, there could be 12,000 closures for major retail stores.
What is one of the main reasons for this decline in shopping in stores? The ease of online shopping.
But is it really that much easier than going into an actual store?
People no longer need to leave their homes to purchase something, so they avoid large malls. Before there were so many ways to connect with people online, people would spend time in the mall. This was a place to hang out with friends, meet new people or have conversations with store employees.
“I think there is something to be said for just the experience of shopping … it’s a chance to get out and do something,” said Brenden Mason, assistant professor of economics.
Since malls are starting to have less foot traffic, they are being forced to close down. That means every store in the mall must also relocate or close down. Unfortunately for those business owners, many cannot make enough revenue to pay the rent outside of a mall.
Amazon is one of the biggest online platforms that has affected stores. There are large warehouses that are filled with millions of products. Because of this, they are able to ship out products as soon as two days. This is a benefit that most stores do not have. Generally, it takes 3 to 5 business days for customers to receive their purchases from a store.
If a store does not have the product a customer wants physically in the store, they can get it online, from another store or not purchase it at all. This can seem like an inconvenience to the customer who is going into the store expecting to leave with a purchase in hand.
Before online shopping, there was magazine shopping. The two forms are very similar because they both involve shopping without having to go into the store. In these forms of shopping, people also judge the products based off how they look and are described in the pictures. It’s a different experience than shopping in an actual store. When shopping in a store, customers are focused on the appearance, texture and the fit of the product.
In a 2015 study, Chung-Hoon Park, an associate professor and Young-Gul Kim, doctoral candidate at the Graduate School of Management in Korea, stated that “the characteristics of information presentation, navigation, order fulfillment in an interactive shopping medium is considered a more important factor in building electronic commerce trust than in the traditional retailing.”
While having an online platform can be important for stores to survive in such a digital world, it is not the most important aspect for all business owners.
“Although we get good sales from there (online), that’s not anywhere near our primary. The online store for what we are … is more of a marketing objective,” said Lisa Collins, owner of Lauren Rae Jewelry Boutique. The online platform for Lauren Rae brings customers into the store. In most cases, when people see items online, they use that as a way to purchase it without having to go into the store.
This small business only has one store so many of its items are unique and can’t be found anywhere else. Most big chain stores do not have this same advantage as they have most of the same products or types of products in each of their locations.
Stores such as Forever 21, Charlotte Russe and Charming Charlies have all filed for bankruptcy. One commonality between these companies is that their products tend to be on the cheaper end.
“I think the new generation, millennials, want a little bit more quality, but they want less,” said Collins. “I don’t think that people want to throw away things anymore; I think they want something that’s going to last.”
If a large company is not selling their products as much as they would like and they feel that a change needs to happen, it is not as easy for them to completely rebrand in a matter of months as opposed to a small business that could have a fast turnover.
In “Forever 21 files for bankruptcy, will close 350 stores worldwide amid restructuring” by The Washington Post, it states that Forever 21 “has become the latest mall giant to file for bankruptcy as it struggles to adapt to changing consumer appetites and a retail landscape dominated by online shopping.
”It’s not just clothing stores that are going out of business either. Stores like Blockbuster, Barnes & Noble and Mattress Firm have also had to close some or all of their stores. When stores have too many locations within a close proximity to each other, they struggle to get enough business at each store. For example, on Route 59 in Naperville, there are at least four Mattress Firms located within almost 10 miles from each other.
Major online stores such as Amazon push brick and mortar stores to change some of the ways the business is being run. “It’s forcing places like Kohls and Macy’s to be more efficient in their inventory management and … if they hadn’t before, they certainly need an online platform now to compete with them, which is good for the overall consumer,” said Mason.
For some stores, it can be difficult to keep up with the online inventory. With big companies, they could have too many products to put online so they might have to choose what goes online and what stays in the store. Smaller businesses could also struggle with an online platform because, as opposed to the bigger companies, they may not have enough product to have both online and in the store.
“A lot of in-person brick and mortar stores have not really adapted into that new environment, so they haven’t bridged that gap between the brick and mortar location and online stores,” said Carly Drake, assistant professor of marketing and management.
