In past couple of years we have seen many big box and mall stores filing for bankruptcy and closing many locations, if not shutting down their entire operations. So far in 2017 bankruptcy and closures have been announced for stores such as Gander Mountain, Macy’s, Payless Shoes, WetSeal, and American Apparel. If you look back on the past several years, stores such as Sports Authority, Sears, JcPenny, WalMart and Aeropostale all had to close hundreds of doors. So why is that? Why are the chains that once thrived struggling to keep their stores open?
The way I see it there are two reasons – Millennials and the Internet, more specifically, Amazon.
Millennials are reshaping retail trends. They are making less money, drowning in student loan debt, and aren’t interested in fancy labels. When a millennial is looking to spend what disposable income they do have, they are spending it on experiences. This includes things like traveling, concerts and other entertainment, and the latest technology. As someone who is part of the millennial generation I can say that if I had $200 to spend I would much rather buy a plane ticket to somewhere I’ve never been, than something like an expensive dress. I like to have the latest phone, but the latest line of clothes from some designer doesn’t interest me. Millennials, myself included look for cheaper clothes options that are more basic and won’t go out of style. I will usually only buy something designer if it is from a second hand store such as Plato’s Closet or Clothes Mentor and I’m getting it at a much more discounted price than purchasing it from a department store.
I shop on the internet for clothes much more often than I shop at a store. It is more convenient and it gives me the options to find deals and discounts that I wouldn’t find in a retail store location. It is no wonder that while all these large chains are closing hundreds of locations a year, Amazon’s sales are skyrocketing year over year. I know that personally, I am ordering things with my amazon prime account weekly and it ships right to my door in two days. Why would I ever go the store to buy anything?!
In the next several years it is expected that the trends that we are seeing with so many retail stores closing will only increase and internet and Amazon sales will only increase.
Below are some links that talk about what stores have filed filed for bankruptcy and have closed locations and a really interesting blog post on how Millennials are causing this shift in retail. Enjoy!