Good Question: What's Happening To Retail, And What Stores Are Successful?
MINNEAPOLIS (WCCO) -- Last year was another difficult one for retailers.
Wal-Mart, Sports Authority, Aeropostale, Ralph Lauren, Macy's, Sears and Kmart all announced they would close stores across the country in 2016.
Malls were all the rage after World War II, as people moved from the cities to the suburbs.
Big box stores, like Wal-Mart and Target, took over in popularity a generation later.
"Now, it's sort of more fragmented," said George John, a professor of marketing at the Carlson School of Management at the University of Minnesota. "You see this format change every 20 years or so, and right now we've got online."
John says many ordinary Americans have not fully recovered from the deep recession of 2008. He says that has hurt almost every major brick-and-mortar retailer. He estimates companies, as a whole, are selling about the same amount as they were in 2006.
"You had sort of a big dip, and then after that you sort of bumping along the bottom," he said. "That's bad news if you're in retail because your profit margins are very thin."
John does not put all the blame on online retail or Amazon, whose sales have grown significantly. He says online sales still only account for less than 20 percent of all retail.
"What Amazon is is a little bit of a harbinger. It tells you that's where the change is coming from," he said. "It's not responsible for the lack of growth. I mean, the economy is still too big for Amazon to call the shots."
But he says it is not all bad news for retailers. He points to Starbucks, Warby Parker, Zara and H&M as bright spots. Of the large, major retailers, he says Nordstrom is probably faring best because they have been most successful in merging online and offline sales.
"You see pockets of imaginative retailers doing well. People who have something fresh, a new twist on an old idea," John said.
John says online and offline shops will ultimately continue to co-exist, but some of today's stores will no longer be in business a decade from now.
