There’s no doubt that the retail sector has been undergoing rapid transformation – fueled by the rise of e-commerce and mobile shopping, as well as post-Great Recession changes in consumer purchasing behavior. What has emerged, according to an article published in The Huffington Post, are remarkably agile and flexible retailers that are growing and profiting despite a still-volatile marketplace.
Recent Census Bureau news shows that the change to the retail industry is not simply isolated to how and when consumers shop: In fact, there has been shift in regards to what they are purchasing. Although median incomes in the U.S. jumped an astonishing 5.2% in 2015 and core retail sales following the Great Recession had recovered by 2010, overall retail spending levels have not yet matched those pre-2008. Not unexpectedly, there has been an overall decline in sales at brick-and-mortar stores – specifically among general merchandisers (i.e., department store and discount retailers), as well as electronics and home furniture retailers. Only the food and beverage services sector (restaurants and bars) are realizing growth in this area.
According to the Census Bureau data, there are two clear trends impacting the retail industry today:
- A significant portion of goods sold at brick-and-mortar stores have shifted online, where e-commerce comprises almost 10% and is on the rise
- Customers tend to dine out when they are in brick-and-mortar locations, which is reflective of the increase in food services sales
The article points to businesses that are exhibiting the creativity and agility needed to thrive despite this shift. Gap and Macy’s, for example, are downsizing their store counts and putting more emphasis on the online shopping experience. Barnes & Noble is capitalizing on the growth of food sales by expanding its dine-in services in an effort to drive up traffic, and Amazon is opening brick-and-mortar bookstores in select markets to add to its incredibly successful online shopping model.
Although consumer spending behaviors have changed, there will always be a need for goods and services. Retailers that focus on understanding what motivates their customers to open their wallets, make data-driven decisions and can swiftly adapt to further change will be those that succeed.
Read the full article here, and contact us to learn why the world’s leading brands rely on JustEnough’s highly scalable, flexible and easy-to-use suite of retail planning solutions to keep pace with ever-more demanding shoppers and the rise of new selling channels.