The Retail Apocalypse continues- 8/13/2019

A Retail Archeology video, "The Deader Side of Sears."

 The "Retail Apocalypse," for any not familiar with the term, is the name given to the closing down of THOUSANDS of retail stores over the last several years.  This has been happening at scale since The Great Recession of 2007-2009.  It really took off about 2016, and the name was dubbed around then.  In an article this past spring, a count of 20,000 retail stores was listed as either closed in 2017, 2018, and closed or scheduled to close in 2019.  There were probably another 20,000 stores that closed from 2008 to 2016.  These counts are major chain stores, and generally don't include all the mom and pop stores, and smaller regional chains, that may have also closed.

This article today on CNBC, "We are in the Middle of the Great Department Store Shakeout-and There's No Stopping It," focuses on the larger department stores.  Among other things, it says that 1,000 actual department stores have closed, many the anchor stores in malls, which used to draw in foot traffic for all the smaller stores that have been closing.  In the department store world, Bon Ton and Gordman's (and Toy-R-Us, though technically not a department store), are gone, Sears is bankrupt, J.C. Penney's is working to restructure its debt, trying to avoid bankruptcy, and sales at Nordstrom's and Macy's are down 35% or more in 2017- 2018.  The market is rough, and getting rougher, for department stores, it's definitely not getting better yet.  Keep in mind this collapse in traditional retail stores happened during the long uptrend in the economy and stock markets.  Now that talk of a coming recession is common, things are likely to get worse faster.

Why is all this happening?  From my own reading, research, and thinking, it seems pretty obvious.  The big shopping mall and shopping center world was the Industrial Age distribution of goods network.  That's how we did it, mass market brands, advertised on the three TV channels, distributed through big warehouses to big stores in big malls.  Hey, it worked well for 60 years or so.  And then the internet came along, and then became a commercial tool, and made shopping online and getting goods shipped direct much more efficient.  Buying products and getting them shipped direct did happen in the 20th century, but it was through mail order catalogs, which is slower and less efficient.

As I've written in my idea, The Big Transition, I see this as the inevitable collapse of the Industrial Age way of distributing goods, while a new, Information Age way of distributing goods, is being built.  The new way is led by Amazon, Walmart, Target, retail brand direct websites, but also includes tens of thousands of smaller Amazon resellers, eBay stores, thousands of Shopify and other small online stores, discount sites like Wish.com, and millions of other retail websites around the world.

  Hell, I'm a homeless guy at the moment, and I've sold my artwork in 9 states and 3 countries, starting on half a shoestring.  It's not that Jeff Bezos and Amazon killed traditional retail, it's just that there was a technology enabled paradigm shift, and most old companies simply didn't keep up.  They were big and entrenched and used to kicking butt in sales, and didn't see the possibilities coming in the online world.  So now they're dying.  Hey, that's capitalism.  Retail natural selection.  If you lose your competitive edge, you go out of business.  Bezos and several others saw the potential of online sales early on, and took advantage of the opportunities.  Sears itself did the same thing itself in the late 1800's, ushering in catalog sales and shipping of goods.

So several major retailers, most of whom should have died off already, are hanging on to the old days, and trying to keep alive a bit longer.  There's still a place for bricks-and-mortar retail, but it will be a different model, and there will far fewer stores across the country.  TJ Maxx is a good example of a retail business that will likely keep going for a long time to come, focusing on really good deals on major brands.  So that's where this is at the moment.  In my opinion, as we head into the next recession, the Retail Apocalypse will accelerate even more.