Tired of reading about the “retail apocalypse” yet?
Yeah, me too.
The retail world is in the midst of an evolution driven by e-commerce and the easy access consumers have to product information, price comparison and the ability to make a purchase with just a couple taps of their smart phone.
But by no means is retail dead.
A recent report by Kiplinger noted that the 4.1% increase in first quarter retail sales outpaced the same time period in 2016. The report noted the growth in merchandise sales helped overcome a slowdown in new car sales and fewer people eating out.
Clearly, consumers are still consuming. The difference is that today they’re doing so much differently and challenging the long-standing norms of retailing.
Many years ago, long before we could shop on our phones, a housewares veteran said to me, “The biggest problem with retail is the retailers.” At that moment the comment stuck with me, but over the years I would come to more clearly understand what that person meant.
Recently, that thought popped into my head as I watched an interview with new Macy’s CEO Jeff Gennette. As he discussed plans to reinvigorate the department store chain, one stat during the interview jumped out at me: 10% of Macy’s customers account for 50% of its sales.
A retailer relying on such a small part of a customer base to drive such a large percentage of sales seems dangerous. This likely is not a new development for the venerable department store and begs the question, why wasn’t this issue addressed a few years back?
Consumers still want to shop and buy, but they are doing so much differently than just a decade ago. For long-standing retailers such as Macy’s to survive and thrive, they will need to follow the lead of Amazon and blow up traditional thinking when it comes to selling products.
This will prevent a so-called retail apocalypse and one day be looked at as a retail evolution.