Retail stores are moving online

Lillian Fu and Dhriti Iyer

With the rise of online commerce, commonly known as e-commerce, major supplies and fashion chains have been closing down their brick-and-mortar stores and transitioning into online retail at an increasing rate over the past couple of years. This trend was expected to continue through 2019, with 9,300 physical retail stores shut down so far nationally, already exceeding the 5,854 shut down in 2018.

This growing trend of stores closing primarily due to the online market has been dubbed the “retail apocalypse.” Coresight Research estimates 12,000 stores will have closed and 155 million square feet of retail store space will have been lost by the end of 2019. Despite these closures, sales have not suffered any decline, with a 4.1 percent increase in total retail sales from 2017 to 2018. The “retail apocalypse” may not signify the end of the retail market, but rather a repositioning of retail as companies transition from physical stores to online ones.

“It’s the larger retail stores that are having the most trouble, but the smaller boutique stores will probably survive because they are so specialized,” said history and economics teacher David Pugh. “If you have something unique, you are doing something that nobody else does, but when you try to do a little bit of everything — like Forever 21, for example — it’s very easily replaced.”

Forever 21, a retailer known for its trendy clothing and low pricing, will close 178 stores nationwide and filing for bankruptcy. On Sept. 21, 2019, the company released a statement informing customers that it would not be going out of business, but it would move its service onto digital platforms instead. In addition, Payless ShoesSource, which filed for bankruptcy in 2017 when it had 4,400 stores nationwide, is currently closing down all remaining stores in the biggest mass shutdown of a corporate chain in history. Closures of Payless ShoesSource, Charlotte Russe and Gymboree alone account for 3,700 of the 8,600 store closures so far.

“I don’t think [retail stores closing] is a crisis, but shopping should not be moved to only online platforms because if it’s solely online, it would cause monopolization,” senior Rachana Muvvala said. “Small businesses would have no chance of competing with big names and a lot of people would lose their jobs.”

Supplies stores are being affected as well. In the next couple of years, Sears will be closing 124 stores nationwide and both Walgreens and GameStop are closing around 200 stores each. In recent years, the video game scene has shifted from consoles like Xboxes to PCs as video games become more accessible online. Gamers are finding a wider selection of games that can be bought with a click of a mouse than ever before, as new games are being designed for the PC through platforms such as Steam rather than for other consoles — and even these consoles are being increasingly purchased online as well. Without customers or new games, video game retail stores are decreasing in business.

Even large corporations such as Target are gearing up for this transition from brick-and-mortar to online retail by concentrating on promoting small-format stores, or smaller-sized individual stores. These stores allow for a more streamlined shopping experience, with products getting into consumers’ hands quicker than in large stores. In 2012, Target introduced these small-format stores, and opened 30 of them over the next five years. These stores became the company’s most productive locations, and since 2017, Target has opened 30 small-format stores annually.

The success of e-commerce platforms like Amazon in recent years similarly reflects the strength of the appeal of convenient and low-effort shopping.
“I definitely shop online more often just due to the fact of convenience and especially now due to [Amazon] Prime two-day shipping,” sophomore Shawn Wang said. “There’s no reason to go outside at this point.”

Today, e-commerce is growing more quickly than physical stores and steadily makes up a greater portion of total product sales nationwide. As a result, many companies have either transitioned onto digital platforms or gone out of business. With the changing times, companies must also make drastic changes in order to keep up with the needs of today’s consumers. There is no doubt that the retail landscape will continue to be upheaved as brick-and-mortar gives way to online retail.