Is Brick and Mortar Retail Dead?
To support current and future New Carlisle businesses, local organizations are hosting a free Creating Small Business Success workshop on September 13. The Gazette is presenting a series of articles leading up to the workshop to spark your entrepreneurial ambition.
The retail market has been greatly disrupted in recent years and bankruptcies of once powerful chains spiked in 2017. Well-known brands including Toys R Us, Payless Shoes and Radio Shack were among 21 major retailers declaring bankruptcy in 2017, a number higher than at the onset of the great recession.
The rise of Amazon is frequently cited as a prime factor in the remaking of the retail landscape, and that company’s ascendance exhibits two major trends. First, the migration of sales to online sellers. Second, increasing consolidation as larger retailers purchase smaller companies. Amazon recently acquired PillPack, an online pharmacy, sending shock waves throughout the pharmacy industry and causing the stocks of CVS, Rite Aid and Walgreen to lose $11 billion in value on the day the acquisition was announced.
The disruptive transformation of the retail environment will likely continue. Many analysts believe the United States is the most “over retailed” market on the planet, having twice as much retail space per capita than runner up Australia and five times as much as the countries making up the European Union. Ongoing change seems inevitable.
In consideration of the shifts already witnessed it would be easy to write the obituary of retail as we have known it. Yet there is encouraging evidence of a retail renaissance led by independent stores willing to challenge the traditional vision and embrace new ways of doing business. What can we learn from those who are thriving amidst disruption?
First, it is vital to compete on dimensions other than price and selection. Online retailers have an inherent cost advantage by eliminating some of the overhead associated with brick and mortar storefronts, plus online shopping makes it easy for consumers to compare prices over a broad range of sellers.
Online marketplaces such as Amazon also enable consumers to access a vast array of choices. Many shoppers find too much choice to be daunting, however, so storefront retailers offering a carefully curated selection tailored to the desires of a specifically defined target audience can cultivate an advantage.
A second best practice, and a blueprint for avoiding price competition, is offering products that are unique or difficult to find. This might mean selling the products of startup companies or focusing on locally sourced products, which are appealing to younger and more socially conscious consumers.
A third way traditional retailers can differentiate is by offering outstanding personalized service and creating unique environments and experiences for shoppers. This might be accomplished through unique décor and lighting or by bringing service offerings into the store, such as coffee bars that provide a place to gather and linger.
Retail remains in a state of flux and challenges abound, yet opportunities exist for storefront retailers to thrive in the age of Amazon. Brick and mortar is definitely not dead.
The free Creating Small Business Success workshop will be held Thursday, September 13, 5:30 – 7pm, at the New Carlisle Olive Township Public Library. For more information, contact John Borkowski, firstname.lastname@example.org.