Shopping in the 21st century not what you may think
E-commerce is ‘happening,’ but in-store sales still strong, researcher says

By NICHOLAS DETTMANN - Conley News Service

Sept. 9, 2017

WEST BEND — Mark Mathews, vice president of research development and industry analysis for the National Retail Federation, acknowledged e-commerce, or online shopping, is no doubt a part of consumer shopping habits.

However, he also admitted he was surprised to see retail brick-and-mortar stores remain strong.

“There clearly is an increase in e-commerce,” Mathews said. “But there are several things that are driving the notion that retail is dying. There are misperceptions of what the data says.”

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In a report published Aug. 30 on the NRF website, IHL Group, an international research and advisory firm based in Franklin, Tennessee, said more than 4,000 brick-and-mortar stores are opening in 2017 than closing among the big chains. In addition, the report says for every store closing, 2.7 stores are opening.

“I think the e-commerce is a thing; it’s happening,” Mathews said. “It’s not as big as it’s being made out to be. The store is still relevant.”

IHL’s report says it projects more than 5,500 stores will open than close in 2018.

IHL’s research reviewed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail segments.

Here is some other data the research revealed:

42 percent of retailers have a net increase in stores, only 15 percent have a net decrease and 43 percent report no change.

The three fastest growing core retail segments are mass merchandisers such as off-price retailers and dollar stores (plus 1,905), convenience stores (plus 1,700) and grocery retailers (plus 674).

Specialty apparel retailers are seeing the largest dips in closings with a net loss of more than 3,100 stores. However, for every chain closing stores, 1.3 chains are opening new stores.

When it comes to chains shutting down stores, only 16 chains account for 48.5 percent of the total number of closing. Five of those chains — Radio Shack, Payless Shoesource, Rue21, Ascena Retail and Sears Holdings — represent 28.1 percent of the total stores closing.

Retail sales are up $121.5 billion through the end of July.

“Without question, retail is undergoing fundamental changes,” said Greg Buzek, president of IHL Group, in a news release. “However, retailers that are focusing on the customer experience, investing in better training of associates and integrating IT systems across channels will continue to succeed.”

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Mathews agreed and added, “You see a lot of innovation. We’re not sure how it’s going to play out yet.”

And that is the key for retailers going forward in the 21st century: innovate.

“The thing I always say is the balance of power has shifted in the last decade from retailer to consumer,” Mathews said. “It used to be you had to go a certain place. Now, everything is in the hands of the consumer to do what they want and when they want. Retailers have to adapt.”