3 Counterpoints to the ‘Retail Apocalypse’

Many news reports suggest retail is headed for its ultimate demise, and it’s often referred to as the “retail apocalypse.” With the news of store closures, bankruptcies and layoffs coming almost daily, that’s an easy conclusion to come to. However, according to Mark Mathews, vice president of research development and industry analysis at the National Retail Federation (NRF), the data doesn’t add up to an impending Armageddon.

In fact, he says the retail sector has made remarkable strides in adapting to what he calls a “fundamental shift” in the way consumers shop.

“The consumer doesn’t see the channel anymore,” Mathews says. “They just want to buy in the most convenient way.”

Mathews says retailers who have successfully bridged into omnichannel sales have focused on that shift in how people shop and have made it easier for consumers to access what they need.

This ease of shopping contributed to sales growth during the 2017 holiday season. Retail sales grew 5.5 percent over the holidays, including both online and brick-and-mortar sales, according to NRF data. Mathews says despite that growth, the myth of the retail apocalypse is still strong.

Hardware Retailing spoke to Mathews to find out why the retail apocalypse theory doesn’t pan out, and he offered three compelling counterpoints.

1. The labor statistics aren’t an accurate representation of retail workers.
   Every month, the U.S. Bureau of Labor Statistics publishes a report on retail employment. Mathews says that if that number is down, it’s seen as proof of the industry’s downfall. However, Mathews says those numbers only include employees of establishments where retail sales actually occur, not warehouses, distribution centers or headquarters affiliated with retail companies. “They’re only capturing a small portion of retail workers,” Mathews says. “The jobs situation for retail is not nearly as bleak.”
2. Amazon isn’t killing retail; it is retail.
   Mathews says some of the fastest growing online retailers are traditional brick-and-mortar businesses, and 9 out of 10 online businesses have stores. “If you don’t have the ability to compete in store and online, then it’s going to be difficult,” he says. “It’s not about Amazon, it’s about a fundamental shift in the way we purchase things.”
3. Sensationalism feeds the narrative.
   People have a nostalgic bond to retail locations, so when they hear a store is closing or going bankrupt, it furthers the retail apocalypse idea, Mathews says. “It’s national news when a retail store goes bankrupt, and it resonates with us because we think, ‘Oh, I used to shop there,’” Mathews says. “In 2016, the top 10 bankruptcies weren’t retailers. There’s certainly a degree of that going on, but on a national level, we don’t see much of a reduction in the number of stores.”