Why are so many retail stores closing … and jobs being lost?
This past year, retail shopping was up 3%.
Online shopping increased by 17%.
The media—as usual—is not telling you the truth.
I own an ad agency (79 agency awards, international clients) and these media lies are so obvious.
Still, retail companies are closing stores all over the country!
Let’s look at a few of them closing across the country:
- Macy’s: 68 stores
- Sears and Kmart: 150 stores
- Aéropostale: 154
- American Eagle: 150 over three years
- Chicos: 120 stores
- The Children’s Place: 200 between fiscal 2015 and 2017
- Finish Line: 150
- Hancock Fabrics: 255/all stores
- Men’s Warehouse/Jos. A. Bank: 250
- Office Depot/Office Max: 400
- Sears & Kmart: 142
- Sports Authority: 140/all stores
- Walgreens: 200 stores
- Walmart: 154 stores
- Wolverine World Wide: 100 stores
The media claims that it’s because of online competition.
Online competition is part of the reason. But it’s much more. Despite online competition, retail sales are up, not down.
Why else are retail stores closing in record numbers?
- Bad management
- Bad marketing
- Poor skills or tools to respond to the rise of online marketing
- A decreasing sense of safety for customers at shopping malls
Larger factors are also decimating big box stores and small businesses, but the media ignore them:
- High and increasing rental costs, especially in California, New York, and other high-tax states … a direct result of excessive local and state taxes, plus unnecessary regulations.
- Massive federal and state regulatory burdens, including Obamacare
- Forced minimum wage hikes … causing job losses and poorer service with fewer employees and more automation.
Less government intervention and more opportunity for competition and innovation will help brick and mortar stores bounce back from their slugging, sagging sales.
Companies like JC Penny, which move headquarters to low-tax, less-regulated states like Texas have already improved their economic outlook dramatically.
Smart retailers also have online ordering for their stores.
And it pays off.
69% of on-line shoppers purchased more once their picked up their on-line purchases at a physical store.
In fact, online companies are now opening retail stores of their own. Amazon.com has begun opening physical stores, including a bookstore.
Other online stores that are opening physical stores include:
- Warby Parker
- AHA Front
- The Arrivals
Tell me what you think. Do you think that brick and mortar stores will bounce back with fewer regulations, taxes, and fees imposed from the state and federal governments? Or is this the new normal of retail? Email me at email@example.com.