Given what has happened in the US, where hundreds of department stores shuttered their doors last year who would want to be a retailer now? We used to quip that when the going gets tough, the tough go shopping but that has collapsed with the latest set of grim retail sales data.
After a grim December, many pundits had been ushering a bounce back, but the figures showed that consumers were not as robust as they once were and the retailers will have to face a painful long-term slowdown. Who is to blame?
Real wages are declining real wages and shoppers are being hit by high levels of consumer debt and the likelihood of higher borrowing costs. But the wider problem is a dramatic shift in the way consumers spend their dosh. There’s been a tectonic shift in the way we spend our time and money. Leisure, travel, social media, eating out, eating in – using subscription and delivery services – and technology are all taking time and Luca that would once have gone straight to the tills of retailers.
This trend boosts Amazon but it is threatening big-name retailers and forcing a rethink about how retail will look in years to come, and what might be done with retail parks and malls when retailers shut up shop and physical retail space becomes redundant. Amazon might be at fault but consumer behavior is also to blame!
From malls through to main street, experiences need to be enjoyed that can’t be at home – from game centers, climbing walls and crazy golf to bras, restaurants, pop-up markets and food stalls. New start-up retailers are emerging from vape shops to ice-cream parlors. Even Microsoft and Dyson are planning stores following the example of Apple.
To compete with the scourge of online shopping, malls, and high streets may have to offer short leases, pop-up spaces and farmer market-style events to bring in smaller businesses that cater to younger people who demand more authentic and local experiences. If retailers are unable to lure shoppers back they will die within the next 12 months or struggle to find the investment needed to survive. But the future of retail is not solely the responsibility of the retailer – it’s the responsibility of the consumer! We just don’t know it yet.