It refers to the decline of brick and mortar retail in the United States due to the meteoric rise of eCommerce. E-commerce shifts people’s shopping habits to home shopping. Not only that, e-commerce is very competitive in terms of price and promotions.
Reasons for Retail Apocalypse
e-commerce Rapid growth
A lot of people blamed e-commerce as the culprit of the retail apocalypse. E-commerce shifts people’s shopping habits to home shopping. Not only that, e-commerce is very competitive in terms of price and promotions.
The data said that e-commerce experienced an increase in sales up to 11% – 20% during the holidays compared to retail stores which only experienced an increase of 1.6%. There are even several department shops that experienced a decline in sales.
Oversupply of malls
The data states that the growth rate of malls in the United States is twice the growth rate of the population. Despite the construction of new malls, mall visits declined by half and kept on declining as time went by.
Mall visits decline also worsened with the emergence of the “restaurant renaissance” phenomenon. Mall visitors now prefer to spend their money on restaurants in a mall, rather than buying shoes or new clothes.
The death of middle-class customers
For retail stores such as Macy’s and Sears, middle-class customers are their main target market. Sadly, they are unable to compete with larger chain stores that brave enough to sell at lower margins.
This makes middle-class people prefer spending their money on cheaper stores. Eventually, independent retailers lost their customers and closing their business.
Poor retail management
The final factor that caused the retail apocalypse is poor retail management. Bad inventory management out of stock merchandise. This makes customers prefer to shop online which has better stock availability.
The condition was made worse by the poor shopping experience. When we shop at a retail store, it’s lacking a unique customer experience.