If you live in or near an urban setting, you know what the birth of the suburbs did to downtown retail. Large long-standing department stores moved away from city centers to suburban malls.
Now, as retail Darwinism continues, those malls are giving way to Amazon.com Inc. (NASDAQ:AMZND) and other online entities. Consider this: Only one retailer on the Fortune 500 list - Macy’s Inc. (NYSE:MC) - is more than 150 years old.
Thousands Of Closings For 2017
Additional chains in trouble include Crocs, Inc. (NASDAQ:CROXC), which stands to close up to 160 stores this year, GameStop Corp. (NYSE:GMEC), which plans to shutter 150 locations, J.C. Penney Co. Inc. (NYSE:JCPC), which has announced the locations of 138 stores it plans to close. Others closing stores include Sears Holdings Corp. (NASDAQ:SHLDD), Staples Inc. (:SPLSN/A), CVS Health Corp. (NYSE:CVSC) and the afore-mentioned Macy’s, which has announced it will eliminate more than 10,000 jobs and close 68 stores.
The most commonly mentioned culprit for all this chaos is Amazon. No doubt about it, Amazon wants to be the place you go to buy – well, everything. Amazon used to be all about books, then electronics and now it sells soup, nuts and literally everything in between.
Amazon’s rise, however, came with the cooperation of shoppers, especially millennials who care less about the brand name and reputation of a physical store than about the price. Meanwhile, Wall Street number crunchers, including Credit Suisse, are telling investors to prepare for a 10% overall correction in the near future as retail outlets continue to collapse. To be fair, others expect no such thing anytime soon.
Related: IS SEARS A GONER?
The Future Of Retail
The question arises: Does bricks-and-mortar retail even have a future? Some believe so and that the nature of that future depends on something called co-creation. At its essence co-creation is when the customer contributes to the outcome.
Co-creation involves two types of participation by consumers – passive and active. Passive participation happens with Nike Inc.’s (NYSE:NKEB) custom shoes where customers design their own footwear from a list of options.
Active participation is much more difficult, but important. An “escape room” experience is an example of active participation. Another is Microsoft Corp.’s (NASDAQ:MSFTB) flagship store in New York. There customers can passively watch or actively engage in, for example, a live broadcast of them playing a Microsoft game. The future of retail, it seems isn’t just about “selling stuff.” It’s also about “doing stuff.”