Good news for retailers! Despite the number of large, well-known brands that are facing bankruptcy and other challenges, the narrative that retail is struggling — or even dying — is significantly overblown.
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Retail is a Diverse and Healthy Industry That Continues to Grow
According to the National Retail Federation, there are over 1 million retail businesses across the U.S. and retail sales have been growing about 4% annually since 2010.
Furthermore, the Commercial Real Estate Development Association indicates that retail rents are at their highest level since 2008 (2016 alone accounts for 86.8 million square feet of new retail construction).
If that doesn’t boost your confidence that retail stores are still in vogue, this next fact should: many online retailers like Amazon, Warby Parker, and Bonobos are recognizing the value of a physical presence and have started experimenting with brick-and-mortar locations.
That being said, it’s important to remember that ALL retailers—whether they’re purely online or just brick-and-mortar—need to adapt to how consumers prefer to shop in our digital world.
While Online is Growing Rapidly, it’s Only a Small Part of the Retail Pie
There’s no denying that competition has increased as advancements in technology have broadened access to the consumer. As a result, says the NRF, “Retailers are having to adapt and invest more capital into creating multichannel customer experiences, and these investments are bearing fruit.” In fact, many store-based retailers have been growing e-commerce sales at a faster clip than online-only retailers, according to data recently released by the Census Bureau.
With online sales growing so rapidly for store-based retailers as well as Internet-only merchants, some might worry that everyone will be doing ALL their shopping online before long.
But Retailers need not worry. Studies indicate that online sales currently make up less than 10% of total retail sales. If you narrow the playing field to online-only sellers, this figure drops below 6%. So, while online is growing rapidly, it’s just a small piece of a much larger pie.
Consumers still shop in stores for reasons ranging from convenience to physical experience. And, as an NRF study reveals,98% of young, digitally-active consumers much prefer to shop in stores.
While more people will research and transact online as the growth of E-commerce continues, many of these transactions will either start or end with people visiting a physical store—to touch or feel the product and/or to pick up online purchases.
“E-commerce is simply another channel to the consumer; it isn’t killing retail — it’s just changing it.”
Source: National Retail Federation
Retail Jobs are still Thriving
Despite the chatter about recent declines in retail jobs, retail employment has been fairly robust for years, growing to 1.5 million since the beginning of 2010, according to the Bureau of Labor Statistics. Clearly, retailers continue to hire and layoffs are way down.
So why is there so much talk of a “retail job apocalypse”?
One possible reason for the misconception is data-related. The Bureau of Labor Statistics only regards employees as retail workers if they actually work in a building in which retail sales occur. This means that all the retail workers in headquarters, distribution centers, call centers and other business lines who don’t interact face-to-face with customers aren’t being accounted for in data results. Unfortunately, this approach to data collection is rooted in an outdated view of the retail industry.
As the NRF points out, retailers have advertised over 175,000 transportation and warehouse-related jobs and 72,000 computer and mathematical jobs over the past year. These jobs represent a small number of the professions that include the diverse and growing retail industry which aren’t being captured in data collection.
Retail isn’t dying, it’s just evolving. While it’s smart to stay informed of the changes and challenges that the industry faces suggests the NRF, it’s also important to recognize all of the innovative new retail businesses that are starting up every day.
And don’t forget to draw inspiration for your own store from all the existing retailers out there that are reinventing the way they do business in the face of a new retail landscape.