The Retail Apocalypse

More retail stores are closing than ever before. Through July 5, 2019, more than 7,000 large U.S. retail chains announced store closures. This is compared to about 5,800 store closings for the whole of 2018. This means that at the end of 2019, we might see as many as 12,000 stores shutter their doors. What has brought on this devastating end? The Impact of eCommerce on Retail Our consumer behavior is slowly changing as we make a definitive shift from buying products in brick and mortar stores to ordering them online, to be delivered right to our homes. The rise of eCommerce plays a large role. In the first quarter of 2019, online sales accounted for 10.2% of all retail purchases--a number that has been rising steadily since 2000. Americans especially enjoy the freedom of purchasing from home on their computers, instead of braving a crowded mall that might not have what they need. This shift has changed not only what we buy, but how we make those purchasing decisions and what informs them. The result of this growing trend has become known as the Retail Apocalypse, which is characterized as the closing of a large amount of especially North American brick-and-mortar retail stores from large chains, starting in 2010. Suburban malls used to be a place where we went to be social and to engage. The Netflix show Stranger Things recently referred to this phenomenon in Season 3 of the series, showing the impressive role the mall played in the 80's and 90's culture. It was an important suburban destination, and the items we saw there informed our tastes and purchases. Mom & Pop shops were an institution. These were well-known stores in the community that we frequented--places where we sometimes befriended the owners and engaged in a traditional buyer-seller dynamic.

With the rise of eCommerce platforms and online stores, we now have a wealth of information to draw from to determine what we like. Our buying experiences have also strangely become both depersonalized and personalized. There is no human interaction anymore, yet every purchase addresses your specific, unique needs. We feel no loyalty to a particular store because we spent a few minutes online scrolling through their items. We don't know the owners and we didn't get a personalized experienceHowever, online purchasing has other ways to personalize the experience.

Showrooming and Webrooming
The footfall in retail stores declines by 15% annually. We just don't have that many people walking around in stores anymore. Also keep in mind that roughly half the customers that are currently still walking around in malls are "showrooming", a term used for when you go and look at products in stores but purchase online afterward. These customers would like to see the product, but would still prefer the convenience of having it shipped to their house. Webrooming, on the other hand, is something that two-thirds of the population practice, researching the product online but purchasing it in a store. Statistics say that approximately 72% of customers review their options online before buying from a brick & mortar store.

The Experience Economy
The rise of eCommerce giants is not the only reason retail stores are going out of business. "Experience-Spending" is another reason and refers to a behavior that started with our generation. The Experience-Economy is described as the next economy after the agrarian economy, the industrial economy, and the service economy. It refers to the practice of businesses orchestrating memorable events or "experiences" for their customers. Going on a tour of Paris is an example of an experience provided by the Experience Economy. The business charges for the value of transformation that experience offers. A direct example is ae transformation an offering of education brings.

If we think of eCommerce, experience-spending presents itself quite clearly in the subscription box model, where consumers subscribe to receive new products to try out each month in the mail, such as beauty products or imported food items. This is a trend that started in the 2010s and is still going strong. There was an explosion of growth in subscription box businesses and the business model from 2011 to 2016, with a 100% increase annually in subscription box sales.

With the subscription box model, we pay for mail-order goods, but we view them as gifts, and that's also what they're called and how they're branded by the company. Both the buying and receiving experience is personalized so that we feel a greater connection to the material "things" we purchased.

Conclusion
According to Statista, the preference for shopping online decreases with age. While 67% of Millenials prefer to shop online, only 28% of seniors prefer online shopping. The people who like to go to brick and mortar stores are getting older. This tells us that online shopping is only going to increase in the future, and retail stores might be a novelty sooner than we think.