Retail apocalypse refers to the closing of a large number of North American brick-and-mortar retail stores; especially those of large chains. Some of the United States’ most prominent retailers are shuttering stores in recent months amid sagging sales in the troubled sector. Over 12,000 physical stores have been closed.
Why do stores fail?
Due to factors such as over-expansion of malls, rising rents, bankruptcies, low quarterly profits outside holiday binge spending, delayed effects of the Great Recession, Management problems, and Bad reputation in the customers etc. North American consumers have shifted their purchasing habits due to various factors, including experience-spending versus material goods and homes, as well as the rise of e-commerce, as well as competition from juggernaut companies such as Amazon and Walmart.
The rise of ecommerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations.
People can buy almost anything online now and have it delivered within a few days—if not the same day.
1. OVER EXPANSION
Many retail businesses start off well and soon plan to expand in order for the business to flourish. While expansion certainly needs to be done, it must be done in moderation. Expanding too much, or too rapidly can lead to a variety of problems which a retail business may not be ready to face.
Before attempting to expand and capture a bigger share of the market, business owners must ensure that they are adequately prepared to meet logistic challenges, financing concerns, staffing issues and supply chain management. Expanding without preparation can make retail businesses battle out for survival.
2. LABOR MANAGEMENT
One of the prime factor in poor brick-and-mortar sales performance is a combination of poor retail management coupled with an overcritical eye towards quarterly dividends: a lack of accurate inventory control creates both underperforming and out-of-stock merchandise, causing a poor shopping experience for customers in order to optimize short-term balance sheets, the latter of which also influences the desire to under-staff retail stores in order to keep claimed profits high.
3. PROBLEMS WITH MANAGEMENT / LEADERSHIP
Of the many reasons why retail businesses fail, problems with leadership or the management is one reason, which is completely the business owner’s responsibility. While a retail business may have been started off by an entrepreneur, it is important to effectively manage the day to day issues.
Lack of proper experience and incompetence of the management is one of the prime reasons why retail businesses fail. Business owners must ensure that they spot and effectively address any management problems before they go out of hand.
4. IN-STORE CUSTOMER EXPERIENCE
The mall experience represents everything that is wrong with the modern customer experience—you walk into stores that don’t have what you are looking for or those aren’t relevant to you and see employees who aren’t engaged or excited to be there. Larger, well-invested, destination malls have tended to outperform unremarkable regional malls by mixing traffic-drawing leisure venues with retail.
Instead of being used for the old way of shopping, perhaps malls should transition into venues for live events where people can come together. Closed stores can be put to good use as exercise spaces, concert venues, or even housing for homeless people. We don’t need to be sentimental or dramatic about stores closing; instead, let’s get creative about how to use the physical space.
5. CUSTOMER SERVICE
Poor customer service just doesn’t cut it anymore in the brick-and-mortar world. If a retailer wants to keep your business, they must treat you well and be willing to give you their time. They must do this because otherwise you can go somewhere else or order online to get the same products for the same amount of money or possibly less.
But with all of these reasons most brick-and-mortar retail business are dying out, retailers have no choice. They either change to give customers what they want, or they’ll eventually die. Ideally, customer experience should be consistent and seamless across channels.
How to get away from Retail Apocalypse?
Embracing a multichannel strategy make the Supply chain management to see avoid challenges like Customer service, Cost, Partnership with the suppliers etc. Multichannel retail is an approach in which retailers offer consumers multiple options for how and where they make purchases that encourages shoppers to research online but pick up purchases in person. The key benefit: significantly reduce expenses while improving the ability to communicate with stores and monitor store compliance. By leveraging tailored retail store management solutions, retailers can skip the extensive training or large system configuration for easy deployment and implementation.
Solutions like PAZO RETAIL STORE MANAGEMENT that are tailored to specific retail functions, retailers can maximize the efficiency of store operations and be empowered to accurately and consistently distribute information, plan, schedule, assign, prioritize, automate, communicate and monitor task compliance.