If you live in the United States, you have undoubtedly seen some retail businesses close over the past few years. Moreover, it has not only been small shops, but also the storefronts of large, seemingly thriving retail chains. You may wonder what’s going on and how this will affect you. No matter what business you are in, it can be frightening to see retail businesses closing all around you.
From bankruptcy to the actual closing of U.S. retail stores, it’s happening. Why is this happening? What is the state of retail brick and mortar stores?
The claim is that the economy is getting better. However, people are still suffering and trying to recoup their losses. Some of those who are reaping the benefits of an improving economy are still timid when it comes to spending money. This accounts for some of the declines in retail store sales.
The largest competition a retailer with a brick and mortar store has is online shopping or e-commerce. Some physical locations can’t compete with their own companies online retail store.
The Current State of Large Retailers
In some cases, the U.S. is seeing large retailers close down completely. It’s a daunting thing seeing a company that thrived for many years close its doors forever.
On a larger scale, the U.S. is seeing large retailers close store locations that aren’t producing to their expectations. Some projected 2016 store closings include:
- Walmart with a projected 154 stores closing in the U.S.
- Sears Holdings will be closing at least 68 Kmart and 10 Sears stores.
- J.C. Penny will see 47 stores close.
- Macy’s is projecting at least 5 stores will be closing.
Many of these closings are to cut overhead costs; putting time and money into stores that are thriving.
At this point, it’s difficult to know the fate of large retailers. It is clear that they will have to continue to evolve. In nearly all cases, large retailers have an online presence and have good sales there. Some are using their physical locations as fulfillment centers for online orders. This is one of the ways they can continue to satisfy a customer base that is turning more and more towards modern technology.
Smaller retailers have been feeling the pinch since the GFC in 2008.
What Is the State of Small Retail Stores and How Can They Survive?
Small retail businesses have suffered too. When large, well-known retailers are struggling, how can a small retail store survive? It’s not easy, but it is still possible.
Location – The location of a retail store is one of the most important keys to success. Business owners must know their customer base and choose a location that is easy for patrons to reach. This includes ease of access, available parking, and the ability to have visible signage
Customer Service – Small retail shops can offer superb customer service. This is something where too many large retailers fall short, and online stores don’t have. Shoppers appreciate being able to be assisted by someone who is friendly and knows their goods. Customers especially appreciate when the store owner and employees get to know them on a personal level.
Keep Costs to a Minimum – Even small retail stores have some significant expenses.
Some ways to cut costs or keep them to a minimum are:
- Negotiate rent or lease amounts. With the decline in renters, landlords are likely to be more lenient and appreciative of a good tenant.
- Hire only employees that are truly necessary.
- Shop around for inventory. Distributors and manufacturers are not all alike when it comes to the cost of their goods.
- Watch credit card merchant fees. Some small businesses are doing away with accepting credit cards because the fees are eating up their profits.
Careful Pricing – Pricing goods is tricky. Retail business owners need to do homework and keep doing it in order to price their merchandise competitively. They must know their competition and try to stay in line with those prices. This can be difficult when trying to compete with large retailers who can purchase at lower cost.
Online Presence – It’s essential to have an online presence these days. Most retail sales begin from an online search. A small retail business should have an excellent website, an online shopping program, and participate in social media. Social media is an excellent, free way to market a business. It’s also another way to reach out to customers with a personal touch.
Marketing – Excellent marketing is crucial. Social media has been noted as a good way to do some free marketing and to stay in touch with customers. A properly built and maintained website is another must have marketing tool. With technology forever changing and changing fast, a successful small retail business will have to remain up-to-date. Today this means excellent online marketing and making use of mobile apps. Simple tablet stands like an iPad or tablet wall mount are key to keeping customers entertained, which result in better connection between them and your store.
How can a small time reseller compete with online?
How Will Brick and Mortar Hold Up to Online?
E-commerce is the way of today and the future. However, brick and mortar is not a thing of the past. Companies that have only had online shopping are now taking to the streets in brick and mortar shops.
While online sales continue to grow, in 2015 they compromised only 7.3% of the total sales in the U.S. People still want to touch and try merchandise before buying. They want to talk to a salesperson about products. They want to shop with friends and family. Brick and mortar will not go away as long as stores continue to evolve and give customers the shopping experience they desire.