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TRC Blog

May 01 , 2014

Retail Stores Are Still Alive and Kicking

Retail Stores Are Still Alive and Kicking

It seems that the traditional brick and mortar retailer is under siege. If you do not have a significant “omni-channel” presence or are not part of “webrooming” with your customer’s tablets or cell phones, then you cannot compete or worse yet, may be doomed to fail. Yet, simple facts contradict this conclusion. Simply put, the lead factor for retail success—location, location, location—remains alive and well.
 
We all hear about how the growth of e-commerce continues to explode and will over time, significantly erode business at the brick and mortar stores. This has been the rumor for many years. Yet today, 94 percent of retail sales are still rung up in the stores, which is why having the right location is the difference between success and failure.
 
Look at the growth of retail over the past two decades. In 2013, almost three million retail locations existed to satisfy the consumer’s appetite. This growth has occurred in the face of multiple recessions and the closing of national chains such as Circuit City, Border’s, Linens N Things, Blockbuster and CompUSA, to name a few. Retailers rang up $369 billion in sales in 2013—almost double from 20 years ago. The collateral benefits from this kind of growth are dramatic to our economy, including job creation, increased construction spending, and manufacturing of goods sold.
 
Why such brick-and-mortar growth in the face of our technology boom? Because at the end of the day, customers still want that in-store experience. We want to be entertained, informed, and to have fun. We want to touch and feel the product we are looking to buy and, above all else, we want the instant gratification of walking out with our treasured purchase.
Analytics, pricing transparency through webrooming, and e-commerce sales are all complimentary to the art and science of retail. However, have no doubt that our brick and mortar stores will continue to lead the way. Alan P. Shor co-founded The Retail Connection LP in 2004. He serves as president and co-chairman and heads up the firm’s investment and merchant banking business. Contact him at ashor@theretailconnection.net.
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