Consider this list of retail companies and store closings in 2016 and early 2017 (compiled from articles on the family of sites):

  • Macy’s, 68 (as many as 10,000 jobs eliminated)
  • Aeropostale, 100
  • American Eagle Outfitters, 150
  • Limited, 250 (as many as 4,000 jobs eliminated)
  • Express, 50
  • Sears/Kmart, 34
  • Ambercrombie, 50/year

Meanwhile, Amazon expects to add as many as 100,000 jobs over the next 18 months.

This list represents an interesting cross-section of the retail industry, spanning value, mid-price and premium stores, and a diverse group of management teams and business/operational styles and practices. Add to this the fact that our economy is not in recession (with positive GDP in all four quarters), unemployment is down, wages have seen small but real increases, and 2016 holiday shopping season metrics saw new highs in several key categories, especially growth in eCommerce sales at the apparent expense of bricks-and-mortar sales. In earlier eras, this kind of economic environment would see high numbers of store openings, not closings.

The point?

Really, nothing more than piling onto the consensus observation that a fundamental shift is underway in the retail industry, driven substantially by technology and made intractable by a generational shift in our relationships with technology. Retail is facing a transformation as profound as the move from whale oil to gas to electricity, from horses to cars, from paper to PCs, the Internet and smartphones.

In many ways, the seismic shift in retail is a slow motion earthquake. Drag on the pace of change is created by the very different shopping habits of the Boomers, GenX’ers, and Millennials. Drag is also created by certain realities of the shopping experience that haven’t been solved (yet) by technology, and are still best experienced on our own in stores. For example, eCommerce clothing purchases generate high return rates because of size, color, and other aesthetic qualities that are not represented well online. In the grocery sector, fresh produce, meat, and dairy represent a complex set of challenges for both picking and delivering successfully in a way that satisfies consumers. But as we saw at the National Retail Federation show in January, technologists are addressing these challenges with artificial intelligence, augmented and virtual reality, algorithms arising from scientific observation and data crunching, Big Data, Business Intelligence, robotics, drones, and every other sort of technical innovations one can imagine.

The need to shop and buy is not waning any more than the need for light from torch to LED. But the experience of shopping in a physical store is facing a major redo in the context of web, mobile, social, and other media through which consumers can interact with brands and goods. Brick-and-mortar is being demoted from the gold standard to merely one option among many. For bricks-and-mortar retail to thrive, it must be and do something unique that cannot be reproduced in other channels. Retailers must be prepared to continue reinventing physical retailing as online technologies continue to encroach. And retailers must be clever about finding synergies, too, because treating the problem as bricks vs. eCommerce instead of bricks and eCommerce is unproductive.

One clue to the future may lie in the fact that the smallest and largest retailers are doing fairly well in this environment; bespoke and specialty vs. massive economies of scale and one-stop-shopping. It’s the mid-sized retailer that seems to be suffering most.

One thing is certain: technology will continue to play a starring role in the digital transformation of retail.


Photo by YellowForester (Own work) [CC BY-SA 3.0 (], via Wikimedia Commons