The truth about the retail apocalypse
An article in Inside Retail provided an interesting analysis of the media-hyped "physical retail apocalypse" at the hands of online retail. Digging into the facts available for the US and UK markets, the piece notes that in 2018, broadly speaking, two shops closed for every one that opened in the US and UK. To put this in perspective, we’re talking about 5524 retail shops out of 3.8 million physical retail shops in the US. We also see this trend flattening out when we look at 2017, when there were 8139 closures in the US. Australian retail appears to be in a similar pattern, with evidence that flattening of the store closure trend is occurring. Essentially, mid-market to lower-value retail (notably mid-market apparel) is bearing the brunt of the physical store closures globally. This isn't all caused by online retail per se, but rather simply the growth of competition from other physical retailers. The media often forgets that omni-channel retailing is only viable with physical shops as the centrepiece. This fuels brand growth, extension, and fierce competition.