Marketing: Is Retail Really Dead? An Indepth Discussion with Dr. Manveer Mann.
Hi, everyone. Thank you for joining us for this week’s Feliciano Live. We’re here with Dr. Manveer Mann. She’s an assistant professor here at the Feliciano School of Business in the Department of Marketing. Our topic title, is retail really dead? As we go through the interview here, feel free to ask questions as we progress through and Dr. Mann will take those questions live. Our first question is why are we seeing stores such as Macy’s, Sears, CVS, closing large percentages of their retail stores?
Well, I think it’s just part of the natural evolution of retail. It’s just, the old is going away and the new’s coming in and the stores that we are seeing that are closing are the ones that are losing their relevance. So, the old is going away and the new ones that know what customers want are thriving. So, it’s not really dead, I would say it’s just the natural cycle of retail, where retailers are continuing to reinvent themselves. And another thing that I would like to point out is that yes, there has been a lot of negative press about a lot of retail stores closing, but if we really look at numbers, according to a research, retailers will open in this year almost 13,000 stores. And it’s projected that about 9,000 will close, that means actually we have 4,000 new stores. So we have a net growth rather than a decline.
And another thing that’s also really important to remember is that all these news about retail stores closing, it’s most of the stores that are closing come from very small set of retailers, actually 66% of the store closing were from 16 companies. So, it’s really a handful of retailers that haven’t really been doing well and catching up with the times, are closing, while we see quite a few that are thriving.
So, for those who just joined us, we’re here with Dr. Manveer Mann from the Department of Marketing here at the Feliciano School of Business. We’re talking about, is retail really dead? If you have questions, feel free to ask those questions and we’ll take this as we progress through the questions here. The second question is, can we expect additional brands to close their doors for good?
Yes, we can expect more stores to close. Projected numbers are anywhere close to 700 stores will close in 2018, but we see that the store closing will be in some specific categories, such as department stores, they have not been doing very well. Specialty stores, apparel, also the ones that are housed in malls and mid-tier malls, not the high-end malls, the mid tier malls haven’t been doing very well. So, we will see some of those stores closing.
So, for those who just joined us, if you have any questions, feel free to ask those. We’re talking about, is retail really dead? With Dr. Mann from the Department of Marketing here at the Feliciano School of Business. The next question is, will we experience a shift to online sales as opposed to brick and mortar?
Well, yes, definitely we see a growth in the online sector, but we have to remember that still almost 90% of the sales actually come from physical stores. So, even though the online stores in itself has seen a very positive trend in growth, but physical stores are very, very important. Now, again, it also depends on the categories like some categories, for example, music, gaming, toys, we see that online actually has a bigger percentage of sales now as compared to physical. But all the other product categories still are mainly driven by physical stores. So yes, online is growing, but brick and mortar is not going anywhere.
Okay. We actually have a question. Can we expect a rise in unemployment? I’m assuming due to the closure of stores.
I looked at numbers again this morning and actually we are seeing a positive trend in employment in retail, according to the Bureau of Labor Statistics, retail actually showed a positive trend. Now, again, these jobs might be coming from also online retailers that still need physical operations to fulfill sales orders. So, we haven’t really seen unemployment. We have actually seen a positive trend so far, and that’s what is projected.
Are there retail businesses that are Amazon-proof?
Yes. I think there are retail businesses that are Amazon-proof, especially in categories where consumers really want to feel and touch products. And also, we’ve seen for example, in grocery, we’ve seen that Amazon has actually bought out Whole Foods. So, even Amazon considers that, yes, the physical presence, the touch and feel is important. So, in product categories there, this is important for consumers that are more experiential. And we will see also in product categories such as apparel, for example, Lululemon, it has these treadmills in their stores, it’s offering meditation classes in their stores. So, in any product category, you could become Amazon-proof if you are providing a unique customer experience and really overall winning over the customers.
So, for those who’ve just joined us, we’re here with Dr. Manveer Mann from the Feliciano School of Business, Department of Marketing. We’re talking about retail and is it really dead? Feel free to ask questions as we go through the interview. The next question is what will happen to shopping malls?
Shopping malls, so I think shopping malls are seeing a really big change. And again, now shopping malls in the retail industry are categorized at A, B, and C categories. So the A category shopping malls are doing really well. Those are your high-end shopping malls, like the Plaza shopping mall that we have here, but then the lower category, which served to mid-tier customers are the ones that are really seeing a lot of the store closings. Macy’s, there’s closing in these stores. So, a lot of anchor stores are not doing well in these kind of areas, but these shopping malls are also trying to reinvent themselves. There have been news of some malls trying to do new things like little pop-up stores for new businesses, small businesses, offering better prices to these businesses. And so, we’ll see how they reinvent themselves as they lose their core anchor stores.
Next question, what actions can struggling retailers take to save their brand?
I think it’s same actions for everyone really. To thrive in the retail industry you have always got to be relevant to the customer, and in today’s environment to be relevant to the customer, you have to use technology for your benefit. You have to provide a really exceptional and unique experience. The bar has really just gone up. So, if you can do that, you can survive and you can really thrive regardless of online retailing or Amazon.
Next question, when is the best time for retailers to start reevaluating and changing their efforts?
I would say now is the time to do that because again, retail is very dynamic, every day matters. So, you can’t just sit and just wait for things to get better. You have to constantly reevaluate. And we see that those retailers do better, that are constantly changing and reevaluating what they need to do.
What changes can we expect to see in future retail?
In the future, we see that retail is going to be more tech-driven. The physical stores are also using technology in many new ways. For example, Wegman stores have just started working with this app where you can use an app to find products in their stores. So, technology will be used in physical stores to enhance convenience and customer experience. And it will be used in many different ways, VR, augmented reality, all of those things are on the table. So, technology is one big piece of retail going forward, and experience which is unique and really captivating is also something that we will see and retailers will find new ways to deliver that.
We have a live question. What could Toys R Us have done differently?
Well, Toys R Us also lost its relevance. Unfortunately, toys is one such product category where we have seen that online share of sales is actually exceeding physical stores. So yes, that was one big problem. And then, of course, we discussed this in our previous Feliciano Live, that Toys R Us had other financial issues, which led to its demise. But again, it lost its relevance. It didn’t really provide a very unique experience in its store. It became a warehouse of toys, but there wasn’t much of a touch and feel, which customers really want to experience the product. So, if it had looked at those things it might have had a different future.
Okay, we have a live question. Why are stores closing like Macy’s, Sears and others?
Like we just talked about, that it’s just part of the natural evolution of retail and the stores that are losing their relevance are closing while others are thriving. And Macy’s, Sears, they’re all in that department store kind of category, and that category in itself has not been doing well. But we are seeing, for example, discount stores like TJ Maxx and that category is really, really doing well and seeing positive growth.
Next question. Are there any foreseeable changes to the stock market as a result of differences in retail?
Yes, of course we will see trends in the stock market as well. First of all, in general, retail accounts for almost 70% of the GDP of our country. So, it has a huge impact on the economy. And from the perspective of the type of retailers, we will see that stocks of certain kind of categories will have experienced a positive trend. Like the online retailing, obviously the stocks have been going pretty high and there’s more investor confidence in those categories. But then again, in categories such as department stores, we are seeing a negative trend. So yes, it will be reflected in the stock market and in the confidence that investors have.
So, for those who just joined us, we’re here with Dr. Manveer Mann, from the Department of Marketing here at the Feliciano School of Business. We’re talking about retail and is it really dead? So, as we conclude this interview, the final question is, is retail really dead?
No, not at all. It is just being reinvented so that it is more relevant to all of us and the way we are living our lives now.
Great. So thank you, Sr. Mann. Thank you for all of us … all of you who joined this interview. We’ll see you next week at Thursday, one o’clock, as we discuss drones and how they’re used in forensic accounting. So, we’ll see you next Thursday at one o’clock. Thank you.
Click here for the video version of this discussion.
© 2021 Montclair State University | All Rights Reserved