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Are Retail Chains Going out of Business?

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Are Retail Chains Going out of Business?

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Business without Borders – Are Retail Chains Going out of Business?

So far in 2019, over 40,000 people have lost their jobs in the retail industry. This is 92% higher than layoffs at the same time last year. Since more and more consumers are shopping online instead of at physical stores, revenue has plummeted for several major retailers. As a result, big retailers are closing several stores. For example, JCPenney recently announced that they would be closing 18 stores. Mark Hamrick, an economic analyst at Bankrate said, “This is significant, and marks an acceleration of store closures and job cuts in the near term.”

For many, the increase of revenue for online retailers may be considered a bad thing, as tens of thousands of people are losing their jobs. While large online retailers, such as Amazon, employ thousands of people, they have automated several of their essential processes, eliminating the need for employees in certain areas of retailers’ operations.

Another example is the announced closure of Lifeway Christian Bookstores. The company announced the closure of all 170 of their physical stores, and shifted their focus on e-commerce. While e-commerce may be more convenient and effective for reaching a large portion of the target market, it doesn’t guarantee jobs.

While some believe e-commerce is bad due to loss of jobs, others think that some of Darwin’s concepts should be applied to the business world. In other words, survival of the fittest. Ron Johnson, CEO of Enjoy, a retail tech company, said the following: “You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.” Many will claim that newer companies caused the downfall of older companies. For instance, some claim that Netflix killed Blockbuster. Others will look at Netflix and state that Blockbuster’s poor customer service and ridiculous late fees killed the movie-rental industry, and allowed for Netflix to grow into the company it is today.

Walmart is an example of a company that is able to succeed, both with physical locations and e-commerce. For basic household needs, such as food, several million consumers shop at Walmart. For Christmas presents, furniture, bedding, toys, games, etc. consumers usually shop on Walmart of Amazon. Before the Christmas of 2018, Walmart offered free two-day shipping on their website, surprising Amazon’s executive board. As a result, Walmart increased their online sales by 43% in 2018. The upbringing of several new companies and the improvement of several existing companies have both had a tremendous impact on the performance of retail stores.

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Are Retail Chains Going out of Business?