Retailers Shift to Fewer, Smaller Stores

As the first quarter of 2014 commences, the retail industry is undergoing a wave of store closings following a lackluster holiday season.

Retail giants Sears, J.C. Penney, Macy’s and Target have all announced cuts this month. Sears recently announced that its flagship location in downtown Chicago will close its doors in April—the latest of about 300 store closings since 2010. The announcements point to a larger trend of increased technological investments and diminished traffic to physical stores, triggering a “tsunami of store closures across the U.S.,” Belus Capital Advisors analyst Brian Sozzi told CNBC.

Though retail sales hit below expectations over the holidays, online spending via desktop devices increased by 10 percent. Amid growing e-commerce traffic, businesses are favoring a smaller network of stores, and those stores are smaller in size than their inventory-loaded predecessors. Fulfillment centers answer the need for storage at a lower price tag than commercial real estate.

These trends point to what Starbucks CEO Howard Schultz calls a “significant sea change” for the retail industry. “I would not want to be a traditional bricks-and-mortar retailer that did not have mobile payments, that did not have social and digital media. Those companies are going to find themselves significantly challenged in 2014 and beyond,” Schultz told CNBC.

Read the full story from CNBC.


About Direct Selling News
Direct Selling News Magazine has been serving direct selling and network marketing executives since 2004. Each issue of Direct Selling News offers content on topics that shape the dynamics of our industry.

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