Fom Sears to Esprit to Danier Leather, once long-standing stores who were staples in malls across Canada have been closing their doors for good, sparking what’s called a “Retail Apocalypse”. This same pattern is happening south of the border, with popular anchors like JC Penny, Kmart, and Macy’s announcing hundreds of store closures. Even the iconic Hudson’s Bay is reported to be contemplating closing their ‘crown jewel’ locations in order to stay afloat.
“Retail has always been about adaptation versus adoption,” said David Ian Gray, Founder of DIG360, which helps retail executives navigating this difficult time of change. “It’s a form of Darwinism. Some people win, some people lose.”
We all know that technology has been the pivotal disruptor that’s shifted foot traffic to mouse clicks, but Gray explains that tech has always changed the retail landscape.
“Refrigeration allowed for grocers to sell perishable items. The automobile meant that people could travel farther than their corner store and shop in malls. Credit cards, bar codes, I really could go on and on. Technology has always changed the way retailers operate.”
So if technology has always been prevalent, what’s the real reason behind so many bankruptcies and ‘for lease’ signs strewn across storefronts? According to our June 22nd panel, it all comes down to Millennials, who are controlling the marketplace.
“Never before has the industry had a more digitally native, price-oriented, and global customer,” said Rick Kohn, Deloitte’s BC retail and consumer products leader, and partner in the Deloitte Private Audit and Advisory Practice. “This group is highly experience-oriented, heavy on lifestyle, and favours sharing assets over heavy asset consumption, like Uber and AirBNB.”
It’s clear that Millennials don’t need the in-store experience in order to make a purchasing decision. Retailers are spending millions of dollars trying to connect to the needs of this dynamic consumer base, with even premium retailers getting on board. It wasn’t until recently that fashion houses like Prada and Chanel began to offer online shopping, finally realizing that the younger generation shops both discounted retailers and high luxury items all in one day.
From artificial intelligence to omnichannel integration, according to Joel Turner, Senior Manager at Deloitte’s Retail Industry Consulting practice, “Nobody’s doing it right. Price and experience are what bring people in stores, and I don’t think there’s one retailer who has mastered the perfect combination of both.”
Whether it’s Woodwards or Blockbuster, is there a retailer you miss the most? Tweet @naiopvancouver and let us know!