Yes, retail stores will continue to exist in 2030.
You may have read news like “Retail is dead”, “Dead malls” or if you are in Australia it would be “Amazon is coming”.
Retail giants like Myers and David Jones are collapsing and closing down stores nationwide. Over in the US, Sears has already closed nearly 300 stores.
If retail giants are struggling in today’s retail market, what hope do smaller retailers have?
The reality behind retail
The reality is there are a lot of retailers who are doing just fine. These retailers are growing same-store sales and opening up new stores. Retailers like Noni B, Bunnings and JB Hi-Fi are not just doing fine, they are doing great!
In FY18, Noni B grew same-store sales by 4.5% and they opened 50 new stores.
Bunnings grew same-store sales by close to 9% and currently, they have 13 stores under construction. In fact, Bunnings is doing so well that more people are googling “Bunnings” than “home improvement stores.
This graph shows the searches for Bunnings, Mitre 10 (a competitor), hardware stores and home improvement stores. The term “Bunnings” itself has more searches than “hardware stores” and “home improvement stores”. That is how dominant the Bunnings brand is in Australia AND you can’t purchase anything from their website. You have to walk into one of their stores to purchase the products you want.
JB Hi-Fi opened 8 new stores and their total sales grew by over 21%. However, the stand out here is The Good Guys (owned by JB Hi-Fi). Their sales grew by 67%!
Retail is far from dead.
Amazon is opening retail stores themselves
- “Amazon is opening a new store…”
- “Amazon just opened its 4-star store…”
- “Amazon reportedly planning 3,000 cashier-less Go stores…”
- “Amazon’s new line of stores…”
What makes these retailers different than a Myer?
They focus on the store experience.
“One of our core goals and beliefs is to create an environment in our stores in which customers feel comfortable and confident and that builds their emotional engagement with our collections and store teams. In all stores, the seasonal stock has been increased and purchased pathways have been reset to make it easier for customers to shop.” – Noni B
“Improving visual merchandising standards, delivering greater consistency across the store network.” – The Good Guys
“Creating better experiences with a dedicated in-store commercial service offer.” – Bunnings
Retail is far from dead.
Retail stores with poor store experience are dead.
The 3 images above are 3 Kmart stores in the US which are closing down.
Retail is evolving and brands which focus on the store experience will thrive.
Apple has over 500 stores in 25 countries.
Tesla, an automotive company has over 300 stores worldwide.
The glory days of retail is over where the retailers with the most convenient location win regardless of the store experience. This is because years ago consumers didn’t have a choice. They had to go in-store to purchase the things they want.
Today, a new competitor has emerged and that is eCommerce with Amazon leading the way. Consumers have the convenience to shop in any eCommerce store they want by just typing in the website URL, browse through all the products they offer from their sofa, click add to cart and get it delivered to their doorstep.
Retail is not dead. Only the ones with poor store experience are.