The Grim Reaper of retail has come out for stores and it seems he won’t stop until little’s left in his path.
We already know, thanks to Credit Suisse, that one in four malls will close by 2022, or a total of 275 shopping center locations. And the financial services firm has said as many as 8,640 stores will shutter this year alone. As of April, stores’ death toll so far in 2017 was right around 2,880.
(Read more about the past year’s long list of bankruptcies: Infographic: The Accelerating Pace of Apparel Retail Bankruptcies)
Now, according to new research from GetApp Lab, part of Nubera business apps discovery network, most retailers that currently run both online and physical store operations, expect to close up their bricks and exist solely on clicks within the next 10 years.
When asked how likely it was that their business would be fully conducted online in the next decade, 66.1% said it was either likely or very likely. Just 16.7% think the shift is unlikely.
The apparent “retail apocalypse” is well upon us.
On the flip side—and in what might be a welcome perspective for retailers—the fact that no department store has filed for bankruptcy should be of some hopeful note.
“Pundits have spent a lot of time talking about the so-called ‘retail apocalypse,’ especially in the last few months. Yet while many department-store chains have been closing stores—and some smaller retailers have gone bankrupt—not a single major department-store company has declared bankruptcy since the Great Depression,” an article by financial services company the Motley Fool noted. “This suggests that department stores are far less fragile than the bears would have you believe. On the flip side, the lack of bankruptcies is contributing to the depth of the current squeeze on earnings and profits across the sector.”
Either way you look at it, retail is in a bind and companies will have to quickly become highly relevant or face the music that might be the end of their physical presence.
“It appears that business owners who run both models of store are prepared, or are at least aware, that the ‘retail apocalypse’ trend could affect their future sales strategy,” GetApp Lab said in its study.