WEST BEND, WIS.
Mark Mathews, vice president of research development and industry analysis for the National Retail Federation, acknowledged e-commerce, or online shopping, is no doubt a part of consumer shopping habits.
However, he also admitted he was surprised to see retail brick-and- mortar stores remain strong, despite the option of online shopping, the Daily News reported.
“There clearly is an increase in e-commerce,” Mathews said. “But there are several things that are driving the notion that retail is dying. There are misperceptions of what the data says.”
In a report published Aug. 30 on the NRF website, IHL Group, an international research and advisory firm based in Franklin, Tennessee, said more than 4,000 brick-and-mortar stores are opening in 2017 than closing among the big chains. In addition, the report says for every store closing, 2.7 stores are opening.
“I think the e-commerce is a thing; it’s happening,” Mathews said.
“It’s not as big as it’s being made out to be. The store is still relevant.”
IHL’s report says it projects more than 5,500 stores will open than close in 2018.
IHL’s research reviewed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail segments.
Here is some other data the research revealed:
— 42 percent of retailers have a net increase in stores, only 15 percent have a net decrease and 43 percent report no change.
— The three fastest growing core retail segments are mass merchandisers such as off-price retailers and dollar stores (plus 1,905), convenience stores (plus 1,700) and grocery retailers (plus 674).
— Specialty apparel retailers are seeing the largest dips in closings with a net loss of more than 3,100 stores. However, for every chain closing stores, 1.3 chains are opening new stores.
— When it comes to chains shutting down stores, only 16 chains account for 48.5 percent of the total number of closing. Five of those chains — Radio Shack, Payless Shoesource, Rue21, Ascena Retail and Sears Holdings — represent 28.1 percent of the total stores closing.
— Retail sales are up $121.5 billion through the end of July.
“Without question, retail is undergoing fundamental changes,” said Greg Buzek, president of IHL Group, in a news release. “However, retailers that are focusing on the customer experience, investing in better training of associates and integrating IT systems across channels will continue to succeed.”
Mathews agreed and added, “You see a lot of innovation. We’re not sure how it’s going to play out yet.”
And that is the key for retailers going forward in the 21st century: innovate.
“The thing I always say is the balance of power has shifted in the last decade from retailer to consumer,” Mathews said. “It used to be you had to go a certain place. Now, everything is in the hands of the consumer to do what they want and when they want. Retailers have to adapt.”
And consumers are seeing it.
Meijer, for example, which opened a store in West Bend earlier this year, has a home delivery service called Shipt. It launched about a year ago and can be found in its stores throughout the Midwest.
“Meijer prides itself on being at the forefront of technology to better serve our customers, from our MPerks savings app, to our new partnership with Shipt, allowing customers to place a grocery order to be delivered right to their doorsteps,” said Art Belt, market director for Meijer in Wisconsin. “Our motivation was to bring the customers added convenience and provide another way to shop our stores.”
Mobile apps such as InstaCart offers similar opportunities for consumers.
“While we know that customers love shopping at Meijer because of the freshness of our grocery options and wide selection of general merchandise that provides a one-stop-shopping solution, we also know that they are looking for low prices and a way to gain back a few hours in their days,” Belt said.
He added acceptance of online shopping has grown in the last 10 years, which has led to things like Cyber Monday, the Monday after Thanksgiving.
“Ten years ago, many shoppers were still anxious about shopping online,” Belt said. “There were security concerns, for instance. But today, shopping online is really second nature to a significant percentage of consumers. Customers are growing more and more comfortable with purchasing everything they need online.
“However, we have found that for many consumers, online shopping is no substitute for going to a brick-and-mortar store to do their shopping. Many customers prefer to do their shopping in-person, to actually touch, smell, and feel the products they need and want.”
A recent NRF study validates that.
In each of the last five quarters, retailers report more than 91.5 percent of their sales came from in-store purchases.
Mathews said a boom in self-checkout offerings have not impacted employment. He also cited the bank teller industry as an example.
“We’ve seen a reduction in tellers in bank branch, but that allowed banks to open more branches because they felt they needed to still get out and work with the customer,” Mathews said. “You may have fewer people at banks, but more banks are open.”
The NRF says employment in retail is growing and has for the last seven-plus years. In June 2010, more than 11.9 million people were employed by a retailer, which includes people working in warehouses or distribution centers. At the beginning of 2017, more than 12.8 million people were employed by a retailer.
Mathews acknowledged automation has raised some concerns about employment, but he doesn’t believe the worry should be that high.
Employers are moving around employees and putting more emphasis on other areas.
“We think the future of retail employees is robust,” Mathews said.
He added, “Retail continues to be strong throughout all this change.
That’s interesting. It seems like there’s all these hurdles. We hear a lot about malls closing. All the numbers point to positives. Retail sales are extremely strong. That keeps surprising us.”