It’s quite obvious that traditional retail, at least in terms of the brick and mortar, is dying. Credit Suisse is projecting over 8k stores will close in 2017, projecting from Q1 numbers.
I went to the mall a couple days ago. That was the first time in (I can’t remember). I went to the Apple store because I had to ask the Geniuses a question.
I don’t like the mall experience. But more so, I feel like mall prices are grossly inflated. I’d say that 95% of my shopping is split between Amazon, Costco, and other local grocery stores. Factor out food and Amazon probably gets ~70-80% of my non-essential purchases. I believe that Jeff Bezos will overtake Bill Gates as the world’s richest person at some point.
Many things are still nicer to touch and feel before purchasing. Even so, how many folks go to a store because to check out a product, only to make the purchase on Amazon? A retailer is paying to be the showroom for Amazon!
A couple big advantages that retailers (brick and mortar) have with their physical presence is the last minute or immediate need, as well as the return/exchange process. Certain categories have higher returns/exchanges, like clothing, for example.
Returning items via an e-commerce purchase is a terrible experience, even if shipping is free. It’s awful. If there is any decent chance for return (doesn’t fit as expected), I am likely not to buy it online.
BUSINESS IDEA: Partner with brands and e-commerce vendors and create a brick and mortar presence to handle returns. This essentially makes it a logistics arbitrage company. It would increase my confidence in purchasing certain things online; that’s good for the brands/vendors. It makes returns cheaper for consumer (not many e-commerce sites pay for return shipping).
At the end of the day, retail isn’t dying, People will always buy things. But brick and mortar needs to evolve. This article, The Death of Retail is Greatly Exaggerated, is right.
