Ending Retail Overwhelm
Macy’s just announced it will be opening up to 30 small stores in strip malls. It’s a big departure from the brand’s usual strategy of becoming an anchor tenant in malls but long overdue. I personally will welcome this trend to smaller, more curated stores, which retail chains like Barnes & Noble are also embracing. Who needs to spend two hours shopping for something that should take less than 30 minutes?
I don’t know about you, but I’ve always gravitated to smaller specialty retailers, not larger department stores. Just thinking of crossing the threshold into one of those larger format stores has me wanting to shop online instead. I don’t need to actually shop for hours for that to happen. Give me a smaller specialty retailer over the Big Box any day of the week.
This new trend may bring shoppers like me back to stores. Clearly, the prevailing approach in retail has not been working. That’s why we’ve seen Chapter 11 filings among brands like Bed, Bath & Beyond, and Christmas Tree Shops, to name a couple, and store closings by many brands–Foot Locker, Party City, and even Walmart. One recent news report says that at least 20 major retailers will shutter a combined total of 3,193 locations in 2023. Even pharmacies such as CVS, Rite Aid, and Walgreens are getting hit with underperforming stores.
Last week, I wrote about the shoplifting epidemic sweeping retail, but that’s not the only culprit. Many retail brands haven’t truly evolved or re-invented themselves in many years. Their brands and merchandise are dated and, in some cases, utterly irrelevant to generations that find out about new products on TikTok, Reddit, and Discord.
Beyond that, the labor shortage has made the shopping experience arduous—just try asking for help from someone on the floor of a Big Box store when you’re in a hurry or attempting to make it through the line in fewer than 20 minutes.
Meanwhile, consumers are short on cash. Consumer credit card debt has reached a record high of more than $1 trillion, thanks in part to inflation, and non-business bankruptcy filings rose by nearly 10% in the year ending in June. Shoppers are feeling financial pain, which means that they will be more selective about what they buy and where they purchase it.
Fortunately, there’s a silver lining to all of this. Retail brands that can find ways to make it fun and exciting to come back to stores will have a golden opportunity. The average American plans to spend $831 this year on holiday gifts, according to NerdWallet. Retailers who find creative and appealing ways to capture those dollars will be the winners in 2023 and beyond.
Monday is Indigenous Peoples’ Day, a holiday that celebrates indigenous people in the U.S. To all who celebrate, Happy Indigenous Peoples’ Day.