Traditional “brick and mortar” retailers are disappearing in record numbers and many are close to drawing their last commercial breath.
The demise of well-known brands may be regrettable to some – but it’s not the end of the world.
While this period of disruption is traumatic for many people, it’s important to keep in mind that there is plenty of good news too. The structural changes that are redefining retailing as we know it also are creating new opportunities for entrepreneurs and job seekers.
One of the changes involves a long overdue rationalization of retail capacity in the United States. As The Atlantic magazine reported earlier this year, America built way too many malls -- The number of US malls grew twice as fast as the country’s population between 1970 and 2015. Measured by gross lease-able area, the US has 40% more shopping space per capita than Canada, five times more than the United Kingdom, and a whopping 10 times more than Germany.
Shifting consumer buying decisions is another driver of disruption. According to The Atlantic, “clothing stores have declined as consumers shifted their spending away from clothes toward traveling and dining out.” As I describe in my Influencer post Not Your Father’s High Street, leisure-related and “experience” outlets such as restaurants, gyms, and hair salons are increasing in number in response consumer demand.
But the structural change that attracts the most attention is the rise of e-commerce. The exponential growth in online sales is widely blamed for killing off traditional retailing and destroying jobs.
Undoubtedly, the e-commerce boom has taken a heavy toll on brick-and-mortar businesses. However, the impact of this trend on employment is not always negative. As established retailers continue to shed jobs, their upcoming online rivals are creating new ones.
In an April 2017 article in Forbes, the economist Michael Mandel argued that in the last decade, e-commerce created 355,000 jobs while “only” 51,000 jobs have been lost in the “general retail” sector.
In addition, as omnichannel business models – which offer consumers multiple channels for purchasing goods – continue to evolve, new roles are emerging for employees. Store personnel are being trained to meet the needs of online customers who visit physical outlets to pick up their purchases. Others are being trained to pick items in the store for customers who want to “click and pick.” Stores are being redesigned to cater for this new breed of customer.