Has the Retail Bubble Burst?

Yes and No are my answers. I like to think the glass is half full. I believe in retail stores. I believe in shopping. I have made a career out of it. That experience of walking in to the store, checking out the latest trends and buying something new and different will never change. But with our busy lives convenience comes first. To make a purchase and have it show up at your door the next day is amazing. I’m guilty of it. Local, regional centers are easier to get to. Now, it’s no surprise that Malls have to be entertainment centers filled with excitement and trendy new restaurants. Brick and Mortar will live on but there will be a lot less stores. This news is not exactly earth shattering. Online will continue to grow. There is some good news. Even at the current pace online will only account for 30% of sales. That means- do the math- 70% of sales will be at brick and mortar locations. For this reason, I am going to hang on to my optimism. People still love to go shopping and while their shopping patterns may change physical stores won’t cease to exist. Don’t get me wrong, retail has been tough. The CEO of Urban Outfitters, Richard Hayne, has equated today’s retail market with the burst of the housing bubble in 2008 and I don’t disagree. The advent of Amazon, an increasingly promotional environment and years of overbuilding have let poor comps. Our industry is hurting and everyday I get resumes from some great leaders out in the field because their stores are closing or consolidating territories. It’s Darwinian out there and only the strong will survive. But, housing rebounded and so can retail. We all have to adjust to the new model. Many smart retailers have invested heavily in e-commerce and Walmart is giving Amazon a run for their money. E- commerce companies need merchants, marketing, social media professionals, branding site merchandisers, CRM and the list goes on and on. Manufacturers need retail talent. Just the other day I placed a former DMM of apparel as the Director of E Commerce for a consumer goods company to run their 100 million dollar Amazon business. There is a demand for great retail executives but perhaps the business model is different. We all have to look at things outside the box to prosper and move forward. So I am going to take the position that the glass is half full.

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