Hard lessons breathe new life into retail stores
Published 12:00 am Tuesday, September 4, 2018
- Outside a Target store in New York, Nov. 4, 2017. Sales are booming at major chains that have taken cues from Amazon, their giant online rival — signs of a revival in a $3.5 trillion industry. (Jeenah Moon/The New York Times)
Malls are being hollowed out. Shops are closing by the thousands. Retailers are going bankrupt. But it may be too early to declare the death of retail. Americans have started shopping more — in stores.
Old-school retailers are experiencing some of their best sales growth in years.
The strong revenues start with a roaring economy and an optimistic consumer. Americans, whose wallets are filled with more cash from the tax cuts, have been spending more.
The boom also reflects a broad reordering of the $3.5 trillion industry, with fewer retailers capturing more of the gains. Stores that have learned how to match the ease and instant gratification of e-commerce shopping are flourishing, while those that have failed to evolve are in bankruptcy or on the brink.
“The retailers that get it recognize that Amazon has forever changed consumer behavior,” said Barbara Kahn, a marketing professor and former director of the retailing center at the Wharton School. “I shouldn’t have to work to shop.”
Many successful stores are now a cross between a fast-food drive-thru and a hotel concierge.
Target’s shoppers can order sunscreen or a Tokidoki Unicorno T-shirt on their phone, pull up to the parking lot and have the items brought to their car.
Nordstrom lets customers in some stores make returns by dropping their items into a box and walking out.
Walmart is employing 25,000 “personal shoppers” to select and package groceries for curbside pickup.
In recent weeks, all three retailers reported stronger-than-expected sales growth for the quarter. Traffic to Target’s stores and online sites grew at its fastest pace since the company began keeping a record a decade ago.
Doomsayers have predicted that online shopping, led by Amazon, would one day conquer all of retail. As store closings set a record last year, no class of retailer was spared.
But the pace of closings has slowed, as the most unprofitable stores have closed and the weakest companies have collapsed. At this time in 2017, nearly 5,700 stores had shut across the United States, according to Coresight Research, a retail analysis firm. So far this year, about 4,480 have closed.
Hiring is up, with an average of roughly 50,000 retail jobs being added each month since February, according to the National Retail Federation.