Drawing on data from Credit Suisse, internet marketing firm Kleiner Perkins predicts that more retail stores will close this year than they have in the past two decades. Things look grim for shopping malls, which rely on chain retailers. But there could be great opportunities for downtowns and neighborhood commercial corridors, whose businesses could see increased sales as chain retailers close. And, independently owned downtown businesses have the ability to customize their products and offer unique experiences tailored to their communities - unlike chain stores. Neil Blumenthal, one of eyeglass retailer Warby Parker's two CEOs, recently said, "I don't think retail is dead. Mediocre retail experiences are dead."
The Community Land Use and Economics Group is a small, specialized, consulting firm that helps community leaders create vibrant downtowns and neighborhood commercial centers. Our work focuses on developing forward-looking economic transformation strategies, with particular emphasis on cultivating locally owned businesses, removing regulatory and financial barriers, creating effective incentives to stimulate new investment, reusing older and historic commercial buildings, and outlining practical implementation plans. Our clients include local and state governments, nonprofit organizations, business improvement districts, developers, and planning firms in the US and abroad.
Yet more bad news for the chain retail industry: February-March were the worst months for retailers since 2009, with retail stores eliminating 60,000 jobs.
This could be good news for downtowns and for independently owned downtown retail businesses, with market share shifting from malls to main streets. Independently owned businesses have always been more adaptable to local markets than chain retailers. And, downtowns already have many non-retail uses.
REI attributes its 5.5% sales growth last year to being organized as a cooperative, listening to customers, and setting itself apart as a retailer that centers its strategy around valuing the outdoors.
Retail prognosticator Deborah Weinswig predicts that minimalism, environmentalism, and the Marie Kondo-fueled decluttering movement mean that people will buy less in the future, investing in products that last longer. She cites the five principles of Patagonia's Common Threads program as an example: reduce, repair, reuse, recycle, and reimagine. "Consumers' future priorities will be ethics, a concept of 'disownership' and sustainability", she says in her November 2016 report "Decluttering: Anatomy of a Consumer Trend and How Retailers Can Win".
Chain Store Age reminds us that Baby Boomers still have greater disposable income than Millennials. Like Millennials, Boomers place a high value on convenience. But, unlike Millennials, Boomers aren't particularly brand-loyal, and they have a pronounced (but not exclusive) preference for shopping in physical stores rather than shopping online.