Can traditional stores survive the online onslaught?
U.S. retailing, an industry that employs one in 10 American workers, is experiencing a profound disruption. A combination of technological change, massive overbuilding and a seismic shift in how consumers shop has created what one business writer called “the retail meltdown of 2017.” The relentless growth of Amazon and other e-commerce sites has taken a huge toll on traditional outlets: Since the start of the year, 2,800 stores have gone under, taking 55,000 jobs with them, and retail bankruptcies are up 31 percent. The stores filing for bankruptcy protection include well-known brands such as RadioShack and The Limited, and even bigger names – Sears, J.C. Penney and Macy’s – are struggling to stay afloat. The outlets that are surviving, such as Apple and Home Depot, are emulating Amazon by embracing technological innovation rather than resisting it, industry analysts say.
Among the key takeaways:
Although e-commerce accounted for less than 12 percent of all retail revenue last year, it grew more than 15 percent, while overall retail revenue rose by less than 4 percent.
In addition to shopping online more, U.S. consumers are spending less on clothes and more on food and travel.
The decline in retail employment will likely hit women and lower-income workers especially hard, because they hold a large percentage of the most threatened jobs.
At the LA Fitness gym in Bowie, Md., on July 10, a group of middle-aged women lingered after their 7 p.m. weightlifting class to compare notes. Still red-faced and sweat-drenched, they were not bragging about how many biceps curls they had managed or how much weight they had pressed. They did not complain about how hard the instructor, who joined them for this post-workout debrief, had pushed them.
Instead, each one rattled off the list of items she would purchase on Amazon.com when she got home: workout gear; sneakers; Amazon’s smart speaker, Echo; makeup; toner cartridges; lightbulbs. “I have a whole list in my car,” school secretary Jeri Darcy told her gym pals. “I don’t need any of it. But I know I’ll need it later.”
Like a Black Friday bargain-hunter who pushes her way into Walmart at 6 a.m., Darcy said she planned to be at her computer by 10 p.m. to take advantage of the first minutes of the e-commerce behemoth’s third annual Amazon Prime Day. The 30-hour sale, Amazon promised, would slash prices on 100,000 items, some by as much as half.
Analysts predicted the 22-year-old online shopping pioneer would rake in more than the $500 million-plus it reaped during last year’s Prime Day, which was its biggest sales day ever, and they were not wrong.1 The sale took in 60 percent more than last year’s event, Amazon reported, surpassing the retailer’s take on Black Friday and Cyber Monday.2
Amazon’s total sales revenue for 2016, at $136 billion, was still less than a third of the $485.1 billion that the world’s biggest retailer, Walmart, took in.3 And yet the trend lines were unmistakable; while Walmart sales grew by just 0.6 percent year over year, Amazon’s soared by 27 percent. The same is true for overall e-commerce sales versus that of physical stores: At $394.9 billion nationwide, online sales accounted for just 11.7 percent of total retail revenues in 2016, but enjoyed a 15.6 percent growth spurt from the prior year.4 Revenues for all retail – not counting cars, fuel, restaurant meals and bar tabs, which generally are not available for online purchase – totaled $3.37 trillion in 2016, just 3.9 percent more than in 2015.5
The divide between online versus in-store sales has created what some analysts, economists and journalists are referring to as “a tipping point” for retail, as the players most heavily invested in brick-and-mortar locations struggle to support their infrastructure in an era of dwindling foot traffic and fewer in-person transactions.
This trend is playing out in an industry with a workforce of about 16 million people, making it the third-largest source of jobs in the United States, behind only education and health services, which employ 22.7 million Americans, and professional and business services, with 20.3 million workers, according to according to a May report from advisory firm Cornerstone Capital Group.6
There is no doubt that online shopping, giving consumers the convenience of ordering products from a Web-based seller for quick home delivery, often at a discount, has disrupted the retail tradition. But Web-based businesses and physical retailers’ own online stores did not do that on their own. A trifecta of technology, a massive overbuilding in the retail space and a sea change in consumer shopping behavior that began during the 2007-09 recession has reached its boiling point.
That became obvious during the first six months of 2017. Since January, more than 2,800 stores have been shuttered – more than during the recession, taking with them more than 55,000 jobs.7 The financial services firm Credit Suisse has predicted store closings could total 8,600 by year’s end.8 More than 300 retailers, including some with household names such as RadioShack, The Limited and Gymboree, have filed for bankruptcy protection this year, up 31 percent from this time last year, according to BankruptcyData, which tracks corporate bankruptcies.9 Nearly two dozen once-popular and specialty retailers – Nine West, Claire’s and David’s Bridal, for example – are in distress and could be next, according to Moody’s Investors Services.10
Department stores whose names are synonymous with U.S. commerce, such as Sears, J.C. Penney and Macy’s, are struggling. In March, Sears reported its “substantial doubt” about the company’s chances for survival – and in July announced that it would begin selling its mainstay Kenmore line of appliances on Amazon.11 A month earlier, J.C. Penney said it would close 138 stores by summer.12 Macy’s will be dropping 68 locations.13 And, the Credit Suisse report predicted, up to 25 percent of U.S. shopping malls may close within five years.14
Economists and analysts agree on three core causes:
The relentless growth of e-commerce. “Retailers thought the consumers were going to continue to shop in a traditional manner,” says Sam Cinquegrani, founder and CEO of ObjectWave Corp., a digital marketing technology and services company. “So they put everything into one big box where [shoppers] can find everything they need. They weren’t counting on Amazon.”
Former J.Crew Chairman and CEO Mickey Drexler put a painfully fine point on that when he acknowledged in June, as he left the struggling company, that he misjudged how quickly technology would change retailing. “I’ve never seen the speed of change as it is today,” he told The Wall Street Journal. “If I could go back 10 years, I might have done some things earlier.”15
In short, shoppers are simply making more online purchases than they used to. Shopping online got easier, thanks to apps and mobile wallets, and cheaper, thanks to pressure by Amazon’s discounted prices on other online merchants.
Substantial changes in shopping and spending behavior. Consumer spending reached its highest level in five months in April.16 But shoppers are not spending their money in traditional department stores.
In fact, Americans are buying 20 percent fewer clothes and have shifted their spending to restaurants, airlines and hotels.17
“It’s the old retail model that’s under pressure and not consumers’ willingness to spend money to buy goods and services,” says Greg Portell, lead partner for global management consultant A.T. Kearney’s consumer products and retail practice in the Americas. “The way consumers shop and what their expectations are is certainly changing.”
Young shoppers have shifted their spending to experiences rather than outfits. In shopping malls, food, entertainment and gyms are faring better than department stores.18 In 2005, 3.6 percent of total retail sales were made by department stores, compared with less than 2 percent today.19
A glut of malls, stores and stuff. Retail is, as industry insiders put it, “over-stored.”20 The United States has more retail square footage per capita than any other country – more than six times that of Europe or Japan – and that is too much, analysts have said.21 “That’s why we’re going to close tens of thousands more stores, we’re going to close malls,” says Manhattan-based retail consultant Howard Davidowitz.
But square footage is not the only problem. Michael Dart, a partner in the private equity practice of A.T. Kearney and the author of the forthcoming book “Retail’s Seismic Shift,” says the supply of material goods exceeds the demand for them. “It’s not a temporary glut because of something that’s gone wrong with the weather,” he says. “There’s just too much supply. It’s basically creating a massive amount of price deflation.”
Davidowitz agrees. “In an overstored environment, everybody sells the same thing,” he says. “The only difference is price. If the only difference is price, then the price goes down,” further straining the bottom lines of stores.
Still, not every retailer is in trouble. And not every success story is online.
On the flip side is Apple, the world’s ninth-largest company, which earns more than $5,000 per square foot of store space, more than any other retailer.22 Nordstrom, Best Buy and Walmart are holding their own, even as consumers spend less money on disposable goods such as clothes. Home Depot is crushing Sears as the specialty big-box store leverages a consumer spending spree on home-improvement goods, a Sears specialty.23 Analysts said Sears’ move to sell Kenmore appliances on Amazon could boost the brand’s sales, which have declined each year since 2007 – but also would give customers yet another reason not to visit a Sears store.24
The difference between the successful retailers and their cash-strapped competitors, analysts say, is that they are borrowing the tactics of the giant online marketplace that started and continues to obliterate shopping as we knew it: Amazon. Instead of lamenting the loss of brick-and-mortar business to Amazon and growing copycats like home goods retailers Wayfair and Overstock, they are embracing technology rather than fighting it.
As economists, retailers and consumers adapt to an industry in transition, here are some of the issues being debated:
Weighing the Issues
Can the traditional store survive?
Despite the rash of store closings over the past few months, most retail experts agree that the industry is evolving, not dying. And they agree that while many stores will close over the next few years, the ones that embrace technology and consumer cravings for adventure will thrive.
“There are more conversations about how negative and dire it is,” says Portell. “But there’s also a story about rebirth. Like a forest fire, it’s negative, it’s traumatic. But there is regrowth. The sector will survive, but it’ll just be different than it is today.”
In Atlanta, for example, just 8.5 percent of retail storefronts are vacant, a 10-year low, and new retail space is taking unfamiliar forms as entertainment districts or as additions to resort-like mixed-use projects, for example.25
Apple, whose stores are among the most successful in the world, has redesigned some of them to include boardrooms where local entrepreneurs and community groups can hold meetings. The stores also will feature educational programs, such as photography lessons using the iPhone. “The stores become a place to experience, physically, live, everything you’ve been doing on your device,” Angela Ahrendts, Apple’s head of retail, told LinkedIn executive editor Daniel Roth.26
Starbucks has created an eco-friendly Reclamation Drive-Thru, built with old shipping containers. The coffee chain also opened a temporary branch in Tokyo to test its Espresso Journey, which is set up like a library. Customers learn from books about the coffee industry while sipping their lattes.27
“Stores are aiming to create a store with a bigger purpose,” says Deborah Weinswig, managing director at Fung Global Retail & Technology. “Retailers and brands such as Apple, Vitamin Shoppe and Starbucks are establishing communities by offering unique in-store experiences and services where customers can connect with others and experience the product.”
Mark Mathews, vice president of research for the National Retail Federation, the world’s largest retail trade association, calls it “retail’s reinvention story.… There’s this narrative that’s going around in the media, every time you see a retail company has poor results, that retail is dying,” he says. “The data doesn’t show that.”
Instead, he says, “retail is undergoing a revolution of sorts, spurred on by technology, which has basically pushed the power to the consumer.” The emerging result, Mathews says, is that most shoppers will buy some things online and some in stores. “When they do it at the store, they expect a differentiating experience in retail. So there’s a lot of change going on. It’s a very challenging time to be in retail.”
That experience could be as thrilling as a roller-coaster ride at Minnesota’s giant Mall of America or as quietly satisfying as working with a personal shopper at women’s boutique White House Black Market, but the goal is the same, Mathews says: “It’s about creating that customer loyalty, that belief in your brand.”
He adds: “There are companies that are succeeding at it.”
Mark Hamrick, a senior economic analyst at financial publisher Bankrate.com, says Nordstrom is among the best at it. The upscale apparel retailer is customer-focused and heavily invested across three platforms, he says: the mainstream department store, which offers a high level of service to customers; its off-price store, Nordstrom Rack, which draws price-conscious shoppers; and its online venture, which Hamrick says the retailer “integrates very nicely into the brick-and-mortar experience.” He points to a designated counter in each store that allows shoppers to order online while in the store.
“Macy’s didn’t do it,” he says. “By contrast, the Macy’s in-store experience has become less satisfying for the customer because as [the company] looked to cut costs, they reduced their staffing in stores. There’s not a comparable discount experience to Nordstrom Rack. And they don’t do as good a job of incorporating the online experience into the stores.”
But just as likely to succeed as the stores with money to invest in customer service, Hamrick says, are those that cater to cash-strapped consumers, such as Dollar Store and Walmart.
Every store, Mathews says, is “competing for a customer. How that customer behaves is out of the scope of what you can control, so you want to get that customer whether they’re purchasing online, picking up in the store, coming to the store. You want to cater to all of that.”
Sarah Quinlan, group head of market insights for MasterCard Advisors, the professional services arm of credit card company MasterCard, agreed.
“It’s not that everything is moving online,” she said. “Online is never going to be everything because shopping is social. We like to be with each other. We like to compare. We like to share this time together. The reality is this omni-shopper is what you need to approach.”28
That “omni-shopper” is one who shops wherever and whenever it is convenient at the moment: at a mall, in a specialty boutique, on a mobile phone while sitting at a traffic light, or during a break while working on a company desktop computer.
The challenge, then, says Cinquegrani, is for retailers to incorporate technology into all aspects of their brick-and-mortar and online stores instead of dividing them into two separate channels. “Commerce is commerce,” says Cinquegrani, who advocates “a merged capability” that infuses technology in equal measures into a retailer’s physical and online stores.
Portell agrees. “Those channels are irrelevant to the consumer,” he says. “They want a product at a particular time for a particular reason at a particular price point. The way they buy that, the way they interact with the retailer, is really without borders.”
Cinquegrani adds: “The ones who can figure it out won’t perish. If they can’t figure it out, they will go away. Retail is not dying. Retail is not dead. The spender is there. The money’s all there. You just need to get out there and reach it.”29
Retail historian Eugene Fram, professor emeritus at Saunders College of Business in Rochester, N.Y., agrees. “There will always be people who want to touch, feel and smell he merchandise,” he says.
Will the loss of retail jobs damage the U.S. economy?
Nearly half of the nation’s retail workers could lose their jobs once checkout-free stores, robots and other automation become commonplace, according to the Cornerstone Capital Group report.30 The news came amid reports that home improvement retailer Lowe’s is testing a robot that can communicate with customers to help them find items in the store. Others are experimenting with point-of-sale automated kiosks. Warehouses are increasingly automated. And new workforce management software allows merchants to anticipate slow periods and automatically schedule fewer on-site employees during those times.
“Everyone is trying to get rid of the check-out line,” says Cinquegrani.
Indeed, cashiers hold most of the 7.5 million at-risk jobs, and 73 percent of cashiers are women, the 56-page reported noted. The working poor hold a disproportionate number of those hourly retail jobs, putting the U.S. economy at risk of a “disruption [that] may cause strains in the social safety net and stresses on local tax revenues,” said Jon Lukomnik, executive director of the Investor Responsibility Research Center Institute, which commissioned the study.31
The economic impact could be broad, Lukomnik said in a news release, and it “should sound the alarm for economists and political leaders.” Lukomnik compared the shrinking retail workforce to the decline in U.S. manufacturing.32
“If retail was a manufacturing facility, there would be an actual outcry right now in terms of lost jobs,” says Dart. “But it’s not concentrated in one community, so if you have a retailer who goes into bankruptcy or shuts down, the loss of jobs tends to be spread across the country. So it’s not getting the same attention as if it were concentrated. But it is a significant economic impact.”
The displaced employees, including many part-time, entry-level workers with few skills, could have trouble finding other jobs, Lukomnik said.
Combined with the rise of online shopping and the closing of thousands of brick-and-mortar locations, automation in stores and retail warehouses eventually could put salesclerks and cashiers in the same category as gas station attendants supplanted by self-service pumps and bank tellers facing extinction because of ATMs.
Some analysts have said displaced store employees could find work in the new fulfillment centers and warehouses opening to process online orders for Amazon and other online superstores. Amazon, which employs more than 340,000 full-time employees, operates more than 70 fulfillment centers.33 In January it pledged to hire an additional 100,000 full-time employees by mid-2018.34 And the Progressive Policy Institute (PPI), a Washington think tank, has estimated that the e-commerce industry overall has added 270,000 jobs since March 2014. In a report, a PPI economist said brick-and-mortar stores actually added 53,000 jobs in the same time period, even as tens of thousands of retail workers were let go.35
PPI calculated that total payroll for e-commerce workers has risen by $19 billion since 2007, while physical retailers have cut payroll by $5 billion. The institute defines “e-commerce” as online shopping, mail order and warehousing. Amazon has asserted that average pay in its fulfillment centers is 30 percent higher than employees earn in stores.36
“If this new pattern continues it will raise wages across the economy and rejuvenate the middle class,” PPI’s chief economic strategist, Michael Mandel, wrote in the report.37 The Cornerstone Capital survey noted that Amazon, Lowe’s, Gap, Advanced Auto Parts and others are paying tuition for employees who are earning certifications that will qualify them to work on the e-commerce side of their businesses.
E-commerce and physical retail jobs are different: Mandel described the emerging e-commerce jobs as a mashup of physical labor and brainpower, as employees are required both to lift boxes and use cutting-edge technology.38
Not every economist, however, agrees that low-skilled store clerks will be able to transition to higher-paying e-commerce jobs.
In a May analysis, The Economist called that prediction “a cheerful assumption … that is deeply flawed” and pointed out that four out of five e-commerce jobs require a college degree, compared with 12 percent of store positions.39 And the Cornerstone Capital study predicted that technology eventually will replace some warehouse and fulfillment workers as well.40
Still, says Mathews, “retail job growth is still relatively robust.” In fact, despite a loss of 17,900 retail jobs in March, April and May, the industry has more than 577,000 job openings, according to the U.S. Bureau of Labor Statistics.41
“We’ve seen a seesaw of gains and losses in retail employment over the past several months, reflective of the ongoing transformation in our industry,” Kleinhenz said. “While we are looking for a new equilibrium in retail employment, it will take time for the industry to adjust to rapid changes in consumer spending habits and demographic patterns.”
Will Amazon’s purchase of Whole Foods disrupt the grocery industry?
Amazon employees in the company’s headquarters city of Seattle can grab groceries, ready-to-eat meals and snacks from their employer’s 1,800-square-foot convenience store without ever standing in a checkout line.
For now, Amazon’s first physical grocery store has no cash registers, and is open only to employees as part of a beta test of the concept: Shoppers with smartphones use the Amazon app, which is linked to their Amazon accounts, to enter the store. As they pull items from store shelves and place them into a “virtual cart,” the app registers the price. If they replace an item to the shelf, the technology deducts the price. The shopper, whose account is charged automatically, leaves the store without checking out.
Amazon has not said when or if it will open Amazon Go to the public. It was scheduled to add locations in the spring but delayed its plans, reportedly because of a technology glitch that prevented the app from monitoring more than 20 in-store customers at a time.42
The $800 billion grocery industry is waiting nervously to see if Amazon disrupts the way grocers sell food and consumers shop for it.
History suggests that it will, as Amazon has left a wake of shuttered companies in most of the product categories it has touched. Cases in point: bookseller Borders, electronics retailer Circuit City and the bankrupt RadioShack.
The day Amazon purchased Whole Foods hinted at the carnage to come: grocery giant Kroger’s stock plunged 9 percent and shares of the parent company of Food Lion and Giant fell 8 percent. Whole Foods competitor Sprouts Markets dropped in value by double digits. Walmart, Target and Costco, which have grocery departments, all suffered stock price declines.44
Amazon already sells groceries online through its AmazonFresh service. Seattle customers who are members of Amazon Prime, a $99-a-year service that comes with free shipping of Amazon purchases and streaming of TV shows and movies, can place their orders online and pick them up at two locations. Home delivery is available in Seattle, Northern and Southern California, New York and Philadelphia for an extra charge.
Walmart, Kroger and others also are experimenting with the “click and collect” model.45
Online grocery delivery, however, counts for less than 3 percent of U.S. grocery sales. More than 90 percent of households shop for food in physical stores at least once a week.46
Amazon’s decision to buy a physical grocery retailer could indicate that mass acceptance of online food shopping is not forthcoming.47
Still, experts say, it is a given that Amazon will revolutionize the technology of grocery sales once it solidifies a plan for its Whole Foods stores, which will keep their name. That move will force other grocers to follow suit if they want to retain their time-strapped and convenience-hungry customers.
Knockoffs of the Amazon app, which recognizes shoppers when they enter a store, could mean other kinds of retailers – or all – will convert to no-checkout zones as well. And technology specific to the grocery industry, but not in wide use, could become commonplace if Amazon shows it is efficient. One example is a scanner that can identify rotting produce and alert the stockroom to replace it.48
“You may start seeing some ways of engaging with your customer that haven’t been tried yet,” says ObjectWave’s Cinquegrani. For example, he said, if he buys figs from a grocer that rarely sells them, he might get a text message the next time the store has them in stock, with an offer to put some aside for him.
“Once Amazon’s growing grocery business reaches critical mass, the shift will happen immediately,” Uwe Weiss, CEO of software company Blue Yonder, said. “All other retailers will have no other choice but to make it work any way they can.”49 Food retailing analyst Joe Agnese of CFRA Investment Research agreed: “Once Amazon is a player in the industry, anything can go.”50
That includes jobs. Simply making cashiers obsolete could put 3.4 million people out of work.51 But shoppers could be the winners in an Amazon-altered grocery industry, as stores with already-slim margins could be forced to lower prices to remain competitive if Amazon drops them first.
The grocery business is unlikely to be Amazon’s last frontier. Company CEO Jeff Bezos reportedly is considering creating brick-and-mortar stores to sell furniture, kitchen appliances and electronics. It has already opened bookstores in some half a dozen cities and on several college campuses.52 And the real estate industry is buzzing with rumors of Bezos’ interest in that industry.53
Amazon’s foray into the grocery business won’t stop at the U.S. border. In interviews with The New York Times, sources with knowledge of Bezos’ plans said Amazon could bring grocery stores to India, where traditional street bazaars dominate the market.54
As wary as traditional grocery behemoths are of Amazon’s entry into their space, the company will not be without competition.
German-based Lidl, which owns 10,000 stores in 27 countries, entered the U.S. market this year with plans to open at least 150 stores in 2018. Aldi, the owner of Trader Joe’s, has more 1,550 Aldi grocery stores in the United States.55
Still, predicts A.T. Kearney’s Dart, the popularity of online grocery shopping and home delivery will grow. “Any purchase that doesn’t require a lot of preparation or is not particularly fresh is going to go online,” he says. “The only real challenge will be prepared foods, prepared meals and fresh vegetables. The vast majority of packaged products will go online and be delivered.”
A History of Disruption
Thousands of years before online shopping disrupted the traditional store and led to the closing of hundreds of American shopping malls; before the first Black Friday sale; before department stores made the neighborhood corner store obsolete; before recorded history began, people around the world figured out how to trade what they had for what they needed. The oldest barter systems, as long ago as 9000 B.C., involved camels and sheep as currency.56
But currency evolved over the centuries. China is credited with releasing the first paper money to replace the copper coins its citizens had been trading with for centuries. The currency evolved from the paper certificates that Chinese merchants would issue to those who deposited the heavy coins with them. The paper currency was referred to as “flying money” because it tended to blow away when the wind blew.57 After 200 years, in the 10th century, the Song dynasty began issuing and accepting paper notes backed by gold reserves during a copper shortage. This became the world’s first legal tender.58
In 1661, Sweden became the first European country to issue banknotes, and the United States in 1775 issued its first official currency, engraved paper notes called Continentals, to fund the American Revolutionary War.59 After the ratification of the Constitution in 1787, the government issued copper 1-cent coins.60
Alongside the evolution of currency was the creation of places to spend it. Over the centuries, the method of shopping evolved from simple trades of animals and produce between neighbors who raised those things to visits to temporary marketplaces and fairs that popped up at Eastertime each year.61 The first shopping districts can be traced to ancient Roman forums, circa A.D. 107. The 5,000-store Grand Bazaar of Istanbul, still in existence and one of the world’s largest shopping centers today, was built between 1455 and 1461.
When the time came that not every family had the means or desire to produce food for themselves or for sale, other means of trading evolved. By the 1800s, for example, it was common for locals to open neighborhood shops, often located on street corners, and so dubbed “corner stores,” to stock and sell the basics to those who lived close enough to walk by.
Since those early times, progress has periodically changed the way people buy and sell, often in drastic ways. Each time, the old system was displaced, or at least reshaped. Four major disruptions have occurred in the history of U.S. retailing.
Disruption No. 1: The Department Store
The first Industrial Revolution in the late 18th and early 19th centuries brought mass-produced products and the birth of the modern retail industry. General-merchandise stores allowed shoppers to buy an array of goods from a single store. Mail-order retailers Montgomery Ward and Sears, Roebuck and Co., which got their start in the late 1800s, offered American consumers a new way to shop.62
Between 1858 and 1867, the original “dry-goods” shops that eventually would emerge as the iconic department stores Macy’s, Bloomingdale’s and Saks Fifth Avenue opened in New York City; they sold a small selection of ready-to-wear clothing and notions such as buttons and thread. The small dry-goods shop that would later become Marshall Field’s was founded in Chicago in 1852; the first Hudson’s opened in Detroit in 1881. The New York Times at the time hailed Macy’s as “a place where almost anything can be bought … and at the most reasonable prices.”63 Social historian Jan Whitaker said those establishments, once they expanded into the cultural icons they eventually became, “reassure[d] Americans by their very existence that life was good, that beauty mattered, and that order and stability prevailed.”64
Still, the tiny corner stores dotting most neighborhoods and bearing familiar family names remained the dominant retail outlet in the early 20th century. Stocked with basics, these local merchants carried a limited inventory of a broad array of products and required shoppers to ask a counter clerk to fetch produce and other necessities, which customers would carry as they walked from the store to their homes. The merchants advised customers about products, repaired items that broke and extended credit to regulars. But this manner of shopping had its disadvantages. Shoppers could not see the prices of the items they requested. And because they could not see what the shopkeeper had in inventory, shoppers purchased only what they had decided in advance to request. Plus, to remain profitable, these corner stores charged high prices.65
“It was a great business model when you’re stocking one brand of everything, and there’s no competition,” a 2011 National Retail Federation video pointed out.66
A Memphis grocery store in 1916 forever changed the way Americans would shop. Piggly Wiggly became the first self-service market that allowed shoppers to stroll through aisles of produce and pick up what they wanted without asking for it.67 Piggly Wiggly also was the first retailer to introduce uniformed employees, shopping baskets, turnstiles and printed receipts.68 Following that model, stores grew larger, prices fell, selection expanded – and consumers embraced it all.
At around the same time, American lifestyles were changing. The invention of the automobile meant that shoppers who could afford cars could drive to the shops and carry more items home. And the invention of in-home refrigeration meant that families could store more food, so they could buy more at one time and shop less often.69 As the automobile became mainstream in the 1930s and 40s, local shoppers abandoned those corner stores in favor of general merchants and the large department stores that had grown from their humble beginnings as small dry-goods shops. Those everything-under-one-roof stores, with now-familiar names like Hudson’s and Bloomingdale’s, had by then moved into multiple-story downtown buildings, where they had room to offer everything from clothing to perfumes to toiletries. Bloomingdale’s, for example, spanned an entire Manhattan city block by 1929 and opened its first branch store, in Queens, in 1949.
Before long, the American shopping hub was the downtown department store. The central business district of every major American city had at least one: often a dominating building with dozens of elevators and escalators, sometimes large enough to fill a full city block. The original, 13-story Marshall Field & Co. in Chicago, for instance, occupied more than three-quarters of a large city block when it opened in 1914.70 In Detroit, the towering J.L. Hudson Co.’s flagship store had 25 floors of retail when it opened in 1911 and was the world’s tallest department store at the time.71
Combined with catalog retailers, department stores led to the demise of many corner stores. Later they would become the anchor tenants for the suburban shopping centers that were beginning to dot suburbia.
Disruption No. 2: Shopping Malls
The Great Depression and World War II delayed the building of more shopping centers.72 When the war ended in 1945, just a few hundred of them, mostly small neighborhood strips, dotted the country.
Still, America was poised for a new era of retail. Workers were ready to produce; consumers were ready to buy. The economy boomed.
By the late 1940s, more than 2 million automobiles were on the road, and the suburban population was growing faster than that of cities. Postwar consumers were splurging on appliances and other goods that had not been available during the war.73
“When World War II ended, you had a great deal of pent-up demand for all types of goods because the factories were beginning to turn to consumer goods again,” says historian Fram. “Cars became available, suburban towns were being built, the baby boom was being born, family life was changing, television was coming on stream.”
In response, shopping centers became larger and more numerous, redirecting business away from downtown shopping hubs and into the suburbs. Supermarkets owned by chains and full-size department stores replaced small grocers as shopping-center tenants. Planned, regional shopping centers measuring 300,000-plus square feet and housing two large “anchor” department stores, along with 30 or more smaller shops, opened in the suburbs of Raleigh, N.C., Seattle and Boston.74 By the early 1950s, the number of regional shopping centers totaled about two dozen and could be found on the outskirts of cities from San Francisco to Framingham, Mass.75
The introduction in 1956 of the first climate-controlled, fully enclosed shopping center in the United States, in Edina, Minn., forever changed American shopping and retailing. The first shopping center to be called a “mall” – a term associated with sprawling, enclosed centers – Southdale Center, located 10 miles from downtown Minneapolis, became the template for approximately 1,500 enclosed malls built over the next 50 years.
Disruption No. 3: Discount Stores
The 1960s and 1970s brought a new type of department store to market: discounters such as Target and Walmart, which both opened in 1962. Similarly, specialty discount stores such as Best Buy, which opened in 1966, and Home Depot, which was founded in 1978, lured shoppers away from traditional, everything-under-one-roof department stores and instead focused on high-turnover items and niches, including home products, toys and electronics.
These so-called “category killers” put scores of long-established family shops, such as hardware and electronics stores, out of business. The big-box stores found savings by leveraging their scale and by introducing high-tech systems for vendor management and distribution.76 They also offered fierce competition to department stores that banked on sales of products in the big-box categories. By the early 2000s, a decades-long bout of conspicuous consumption abruptly ended when an economic downturn, along with rising concern about the environment, quieted the lust of middle- and upper-income Americans for stuff and for showing it off. Extravagance bent to frugality as another, more severe recession claimed 8.7 million jobs from December 2007 to June 2009, and consumer spending declined more than during any other period since World War II.77
“Households cut spending, shed outstanding debt, and increased their rate of personal savings in response to reductions in income, wealth, confidence, and credit access,” U.S. Bureau of Labor Statistics analysts wrote in the agency’s October 2014 Monthly Labor Review.78
Retail has not been the same since. As the economy slowly recovered from the last recession, Americans started spending money again, but not in the same way, and not on the same things. That has led to a decline in foot traffic at American shopping malls every year since 2011.79
Disruption No. 4: E-commerce
In 1994, 98 million consumers bought $60 million worth of products from home by placing phone orders to catalogs and TV shopping channels.80 In August of that same year, a Philadelphia man named Phil Brandenberger made history when he conducted what is believed to be the first retail transaction on the internet using his credit card.81
Brandenberger charged $12.48 to his Visa for the CD “Ten Summoners’ Tales” by the musician Sting. The seller was Net Market Co., which 21-year-old Daniel M. Kohn had started from his Nashua, N.H., home.
The headline in The New York Times that day read, “Attention Shoppers: Internet is Open.”82 That was about to become the understatement of the century, and of the following one.
Another technology entrepreneur, Bezos, started Amazon that same year and began selling books the following year. The online bookstore soon added DVDs, music, video games, electronics and clothing and eventually expanded to sell nearly anything else a shopper could buy in a department store. Author Brad Stone, in his 2013 book, “The Everything Store: Jeff Bezos and the Age of Amazon,” said in the online store’s first days, a bell would ring in the office every time a customer made a purchase. That stopped within a few weeks because the bell was ringing too often.83
Five years later, Bezos was Time magazine’s Person of the Year, and his e-commerce site was on its way to turning traditional retail on its head. In quick succession, the auction site eBay began operating, and online retailers such as Overstock (1999) and Wayfair (2002), which would grow into e-commerce giants, opened their virtual doors for business.
In 2000, the world’s largest retailer, Walmart, started a website, adding an e-commerce channel to the 2,985 discount stores, supercenters and Sam’s Clubs it operated that year.84 Macy’s, Nordstrom and Sears posted their websites in 1998.
Interest in online shopping crawled at first as consumers got used to this new form of commerce and gained trust in the security of their credit card numbers; e-commerce accounted for just 0.6 percent of total sales in the fourth quarter of 1999, according to the U.S. Census Bureau. In the fourth quarter of 2007, when the U.S. government officially declared the economic downtown a recession, online shopping made up 3.5 percent of total sales.85 Without ever taking a step back, even during the recession, e-commerce grew as a percentage of total retail sales to 8.5 percent in the first quarter of 2017.
While the tug-of-war between e-commerce and traditional stores steals headlines, the retail industry is sorting out a few less-publicized issues. Among them are:
Shorter leases. Since the 1950s when the shopping mall became America’s favorite place to spend, the stores that occupied them have signed long leases – typically five to 10 years in duration. That is starting to change. Commercial real estate adviser A&G Realty Partners reported in June that retailers are holding out for leases that last just a year or two.86
Andrew Graiser of A&G told Bloomberg that owners “are now struggling to figure out how many stores they actually need” and which locations they might close. A short-term lease gives the retailer the leeway to shutter stores or reduce their size as they become unprofitable rather than when their leases expire.87
In addition, it is unclear which shopping malls will survive as the retail industry reshapes in response to the growing migration of shoppers to e-commerce.
Mall-owner landlords are “fighting back, hard,” Ken Frieze, CEO of retail advisory firm Gordon Brothers, told Bloomberg. “What you have is a game of chicken up to the end.” Uncertainty in the industry also brought automatic lease renewals to a near-halt.88
Owners of so-called “A-level” malls – those thriving because of their entertainment and experience offerings – are leveraging that success to require some stores to open in less-affluent B- and C-level malls in order to keep their premium locations.
A bailout for retail? Retail consultant Greg Petro has offered four reasons why the federal government should bail out the retail industry.
In a column in Forbes, Petro, the CEO of First Insight, a retail marketing and branding consultant in Warrendale, Pa., said tax reforms, legislation and changing regulation under the Trump administration could exacerbate traditional retailers’ struggle to keep their brick-and-mortar stores open. President Donald Trump’s travel ban, which restricts some citizens of Muslim-majority countries from entering the United States, for example, could reduce international traffic to the United States, further weaken tourism and possibly dampen demand for U.S. products, he said.89
Petro noted that the retail industry is struggling with enormous job losses, caused by the closing of thousands of stores; the impact of the success of online retailers on those stores’ ability to survive; and the inability of Chinese manufacturers to speed up production to meet demand.
Before long, he said, “many will be lamenting the loss of yet another industry in our great country.… A bailout would give debt relief and a chance for traditional retailers and brands to innovate and explore new tech innovation in manufacturing.”
Others said a bailout is unlikely. A.T. Kearney’s Portell, for one, calls the notion “a bit of a stretch.”
“It’s not that companies can’t be successful in retail,” he says. “It’s that bad retailers with poor retail practices are under pressure, and it’s changing. But someone will win. It’s incumbent upon the industry to figure out how to meet that demand as opposed to: ‘We’re not changing; come help us.… I don’t think there’s a loud voice coming from retailers that they need a bailout.”
Private sale. Even from a position of relative strength, Nordstrom is exploring ways to keep its stores open. One of the options for the family that founded the higher-end apparel store a century ago: shifting the publicly traded company to private ownership.
Wall Street embraced news of the possible shift: Shares in Nordstrom soared 10 percent on June 9, the day after news broke about the family’s plan to seek private investors. But its stock prices had fallen 2.8 percent over the prior year, which some analysts explain as a misunderstanding on the part of investors who lump the company in with faltering peers such as Sears and Macy’s.90
The family reportedly intends to focus less on short-term profits, as shareholders dictate, and more on its core retail business, according to The New York Times.
Truck stop. Retail’s time of transition is reshaping the trucking industry. According to FreightWaves, an industry magazine, retail shipments are “moving faster and shorter distances,” leading to a steep rise in partial-truckload and parcel shipments.
“Parcel carriers and courier companies have both benefited from the growth in e-commerce at the expense of brick-and-mortar retail,” transportation and logistics consultant Satish Jindel, president of SJ Consulting Group, told the magazine.91
Full-truck shipments rose just 0.6 percent from 2011 to 2016, while less-than-truckload trips grew 2.7 percent and parcel shipments climbed 5.8 percent, according to Jindel. The length of hauls declined 4 percent as more distribution centers have opened and more consumers pick up online orders in stores, he said.
Trucking companies are innovating to take advantage of the trends, the magazine said. An example is Schneider National, which has created a “last-mile delivery service” that offers customized home, commercial and store delivery with white-glove service.
Try before you buy. Many online retailers have satisfied online shoppers reluctant to purchase clothes, because of the high risk that the apparel would not fit and need to be returned, with free return shipping. Amazon is beta-testing a service to allow customers to try the clothes on at home and pay only for the items that fit.92
Prime Wardrobe will ship, with a resealable box for returns, between three and 15 items at a time without charging a customer. Once the shopper returns the unwanted items, Amazon posts a charge for the rest.
The service is invitation-only for now, but eventually could be rolled out to all Amazon Prime customers, who pay $99 a year for perks, including free shipping and videos.
Amazon is not the first to experiment with a try-before-you-buy model. Eyewear company Warby Parker, for example, ships eyeglass frames for customers to keep for up to five days without payment.
The Next Disruption
History has repeated itself in the retail industry four times as industrial and technological progress swept away an old way of business to make room for a new one. A fifth disruption, then, seems inevitable.
If the “old” way of doing business in the future involves a retail economy dominated by one or more online superstores, such as an ever-growing Amazon, that will be where the disruption occurs.
Loren J. Trimble, co-founder and CEO of management consulting firm AArete, predicts that even the unstoppable Amazon could be knocked down to size by a potential new wave of digital category killers.
Just as Home Depot, Lowe’s, Toys R Us, Best Buy and Bed, Bath & Beyond ended scores of small stores and even departments within department stores that sold the same products as these new, big-box specialty retailers, future digital category killers could rob Amazon of sales in some of the thousands of categories in which it trades.
Trimble offers a hypothetical: A digital big-box retailer devises a way to “do jeans better than anybody else” and sells nothing but jeans – with a million options. The firm’s website identifies and displays every brand, color and style of jeans on the market, with a way for the shopper to narrow down the choices according to what she is seeking.
This hypothetical digital super-boutique has a technology that allows the shopper to post a full-body photo of herself, or perhaps the website will snap it. Then, the site will dress the photo with the jeans the shopper has selected, so she can see how they will look on her, without ever leaving home.
She will give her smartphone the OK to make the purchase, which might automatically be charged to a credit card whose number she has prescanned into her smartphone. The jeans arrive at her home via drone within hours.
She will never buy jeans anywhere else. Amazon drops jeans from its product line.
“It’s the digitization of a category that will migrate and peel business away from Amazon as time goes on,” Trimble says.
That jeans boutique might also open physical locations, but they will be small and portable and will carry no inventory.
Instead, mall kiosks – or even more likely, tiny stores selling jeans within another established store not owned by digital boutique – will pop up, test the market and then move on if sales are slim. It will be equipped with a virtual dressing room that allows a shopper, without undressing, to look in a mirror and see her image dressed in the various pairs of jeans she has selected from a digital display. The mirror also will reflect her image wearing jeans she did not pick out but that, based on the selections she has just made, she might like. A “yes” or perhaps a touch will complete the sale. The jeans will be waiting at the door for her when she gets home.
Cinquegrani says futuristic technology is already available, but few retailers use it because they are spending their digital resources on making their websites more competitive.
He foresees a future store equipped with beacons that not only know when a customer enters a physical store but which aisle she is browsing. The technology recalls which items she purchased during her last visit to the store or its website, and sends her a text describing a product that would complement the first one, along with a coupon for it and the aisle number where she can find it.
“The key to all this technology is personalization,” says Cinquegrani.
Atlantic Magazine Senior Editor Derek Thompson, however, predicted a technological disruption that could further whittle the population of shopping malls and the stores that occupy them: the driverless car.
“CVS could have hundreds of self-driving minivans stocked with merchandise roving the suburbs all day and night, ready to be summoned to somebody’s home by smartphone,” he said. “The future of retail could be even weirder yet.”93
|1800–1900||Department stores begin humbly.|
|1818||Henry Sands Brooks opens H. & D.H. Brooks & Co., the first U.S. men’s clothier. One of the oldest continuously operating U.S. businesses, the chain is now called Brooks Brothers. Some consider this America’s first department store.|
|1825||Arnold Constable & Co. opens in New York City as a small dry goods (clothing) store; by 1857 it expands into a four-story department store. Arnold Constable was one of the first stores to bill credit customers monthly rather than twice a year. It closed in 1975.|
|1852||The retail dry goods store P. Palmer & Co., which would become Marshall Field and Co., opens in Chicago. In 2005, Federated Department Stores bought the iconic department store and rebranded it with the Macy’s name.|
|1858||R.H. Macy & Co. in New York City becomes the first large-scale department store, selling wares ranging from dresses to furniture.|
|1862||The Marble Dry-Goods Palace, which opened in 1846 and covered an entire New York City block, moves to an eight-story building and unveils the first department store elevator. This innovation allows department stores to expand upward.|
|1879||Ohio saloon owner James Ritty patents his invention of the cash register.|
|1881||The first Hudson’s opens in downtown Detroit. That flagship store closed in 1983.|
|1886||R.W. Sears Watch Co., the predecessor to the Sears department store chain, begins as a mail-order watch retailer.|
|1900–1920||Self-service shopping begins.|
|1900||Corner markets with limited inventory are the dominant form of retail.… Retailers cluster strips of small convenience stores close to the street along streetcar routes to sell groceries and sundries to commuters.|
|1916||Piggly Wiggly in Memphis becomes the first self-service grocery store, allowing shoppers to pick up items themselves rather than asking a clerk to fetch them.… Market Square in Lake Forest, Ill., becomes the country’s first planned shopping district.|
|1930–2000||Shopping malls transform retail; e-commerce takes first steps.|
|1937||Shopping carts are invented.|
|1939||Under pressure from department store owners who want more time between Thanksgiving and Christmas for holiday sales, President Franklin D. Roosevelt temporarily moves the federal holiday celebrating Thanksgiving from the fourth to the third Thursday in November.|
|1954||Detroit’s Northland Center becomes the world’s largest shopping center with 111 stores and a vast parking lot.|
|1956–59||Developers build 231 shopping centers of all types.… Southdale Center, the country’s first enclosed suburban shopping mall, opens in Edina, Minn.|
|1974||VF Corp., owner of the Vanity Fair clothing brand, opens the first multistore outlet center in Reading, Pa.|
|1979||British inventor Michael Aldrich connects a modified television set to a transaction-processing computer via telephone to allow for what he calls “teleshopping.” Aldrich calls himself the inventor of online shopping.|
|1986||First “power center” – filled with big-box stores such as Toys R Us and Bed, Bath & Beyond – opens in Colma, Calif., a San Francisco suburb.|
|1989–93||Shopping mall construction drops nearly 70 percent, largely in response to the savings and loan crisis.|
|1992||The Mall of America opens in the Minneapolis suburb of Bloomington on the site of the demolished Metropolitan Stadium. It remains the largest mall in the United States.|
|1994||Entrepreneur Jeff Bezos starts e-commerce website Amazon.com.… The first online credit card transaction takes place when a Philadelphia resident purchases a Sting CD from Nashua, N.H.-based Net Market Co.… Pizza Hut fills its first online order.|
|1995||EBay begins as an auction site for collectables. It evolves into a person-to-person trading community.|
|1999||Shoe retailer Zappos becomes the first online-only store. In 2009, Amazon acquired it.|
|2003||Apple opens iTunes store.… Amazon posts its first annual profit: $35.3 million.|
|2005||Online retailers host first Cyber Monday on the Monday after Black Friday (the day after Thanksgiving).|
|2007||A Pew Research Center survey finds that 81 percent of Americans have shopped online; 66 percent say they bought something online.|
|2009||Amid a recession, annual retail sales nationwide dip 3.6 percent from a year earlier, the National Retail Federation reports.|
|2010||Retail sales grow 3 percent over the prior year, according to the National Retail Federation.|
|2015||Consulting firm Green Street Advisors reports that more than two dozen malls have shut down since 2011 and another 60 are near death.|
|2016||Shoppers make more purchases online than in stores for the first time, according to a United Parcel Service survey.… Amazon posts revenue of $136 billion, up from $107 billion one year earlier.|
|2017||More than 300 retailers file for bankruptcy in the first six months of year, despite nationwide sales growth of 3.6 percent.…. Financial services firm Credit Suisse predicts up to one-quarter of American shopping malls will close within five years.|
Resources for Further Study
Beckford, Mahogany, “The Little Book on Big Data: Understand Retail Analytics Through Use Cases and Optimize Your Business,” Amazon Digital Services, 2016. A digital marketing specialist reviews business analysis methods, techniques and tools, using case studies from business startups to illustrate her points.
Dart, Michael, and Robin Lewis, “Retail’s Seismic Shift: How to Shift Faster, Respond Better, and Win Customer Loyalty,” St. Martin’s Press, 2017. Two retail industry experts say Amazon’s online model has become the norm in the retail industry. They also confirm that today’s shopper values access over ownership and experience over material goods.
Lewis, Robin, and Michael Dart, “The New Rules of Retail: Competing in the World’s Toughest Marketplace,” St. Martin’s Press, 2014. The authors explain how, in an age of technology and globalization, retailers need three competencies to survive: an ability to anticipate and respond to changing consumer demands; a deep connection with consumers; and control of the “value chain,” the activities taken by the manufacturer, warehouse, carrier and supplier of a product as it makes its way to the consumer.
Stephens, Doug, “Reengineering Retail: The Future of Selling in a Post-Digital World,” Figure 1 Publishing, 2017. A retail industry futurist predicts that artificial intelligence will redefine the industry and argues that Amazon’s experiments with technology will drive other retailers to greater levels of innovation.
“Sorry, we’re closed: The decline of established American retailing threatens jobs,” The Economist, May 13, 2017, http://tinyurl.com/
Petro, Greg, “Four Reasons Why A Government Bailout For Retailers Is Inevitable,” Forbes, June 6, 2017, http://tinyurl.com/
Thompson, Derek, “What in the World Is Causing the Retail Meltdown of 2017?” The Atlantic, April 10, 2017, http://tinyurl.com/
Wingfield, Nick, “Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More,” The New York Times, March 25, 2017, http://tinyurl.com/
Reports and Studies
“Deep Dive: The US Retail Revolution Solution,” Fung Global Retail & Technology, July 7, 2017, http://tinyurl.com/
“Retail, Wholesale, and Distribution Industry Outlook 2017,” Deloitte Center for Industry Insights, 2017, http://tinyurl.com/
“The State of Retail 2017,” TimeTrade Systems, March 13, 2017, http://tinyurl.com/
“The State of Retailing Online 2017: Key Metrics, Business Objectives and Mobile,” National Retail Federation and Forrester, January 2017, http://tinyurl.com/
“Uniquely Gen Z,” National Retail Federation and IBM, January 2017, http://tinyurl.com/
Hodson, Nick, Christopher Perrigo and Douglas Hardman, “2017 Retail Industry Trends,” PwC, 2017, http://tinyurl.com/
Hortaçsu, Ali, and Chad Syverson, “The Ongoing Evolution of US Retail: A Format Tug-of-War,” Fall 2015, American Economic Association Journal of Economic Perspectives, http://tinyurl.com/
The Next Step
Bain, Marc, “Anxiety among Hispanics in the Trump era is taking a bite out of US retail sales,” Quartz, July 18, 2017, https://tinyurl.com/
Jagoda, Naomi, “Pence sells Trump’s tax-reform plan to retailers,” The Hill, July 18, 2017, https://tinyurl.com/
Mercado, Darla, “Despite President Trump’s tweet, Amazon already collects sales taxes,” CNBC, June 28, 2017, https://tinyurl.com/
Cadet, Dayana, “Millennials Going Green Means Retail Must Follow,” Total Retail, May 24, 2017, https://tinyurl.com/
D’Innocenzio, Anne, “Back-to-school shoppers look for eco-friendly clothing,” The Associated Press/The Seattle Times, July 17, 2017, https://tinyurl.com/
Vij, Vikas, “Target Aligns CSR with UN Sustainable Development Goals,” Triple Pundit, July 20, 2017, https://tinyurl.com/
Opposition to Amazon
Abrams, Rachel, and Robert Gebeloff, “In Towns Already Hit by Steel Mill Closings, a New Casualty: Retail Jobs,” The New York Times, June 25, 2017, https://tinyurl.com/
Bartz, Diane, “Retail workers union opposes Amazon’s purchase of Whole Foods,” Reuters, July 17, 2017, https://tinyurl.com/
Gurdus, Elizabeth, “Cramer: This market is scared of Amazon, and it’s fighting back,” CNBC, June 22, 2017, https://tinyurl.com/
Dennis, Steve, “Physical Retail: Definitely Different, Far From Dead,” Forbes, July 6, 2017, https://tinyurl.com/
Matthews, Christopher, “The debate over the ‘death of retail,’” Axios, July 16, 2017, https://tinyurl.com/
Wahba, Phil, “The Death of Retail Is Greatly Exaggerated,” Fortune, June 9, 2017, https://tinyurl.com/
International Council of Shopping Centers
221 Avenue of the Americas, 41st Floor, New York, NY 10020-1099
1-646-728-3800, Option 1
The global trade association of the shopping center industry.
National Federation of Independent Businesses
1201 F St., N.W., #200, Washington, DC 20004
An association of 325,000 small- and independent business owners whose self-defined aim is to level the playing field with big business, government and labor in the areas of taxes, health care and regulations.
National Grocers Association
1005 N. Glebe Road, Suite 250, Arlington, VA 22201
The national trade association representing the retail and wholesale grocers who make up the independent sector of the food distribution industry.
National Retail Federation
1101 New York Ave., N.W., Washington, DC 20005
The world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers and other retailers from the United States and more than 45 other countries.
Retail Industry Leaders Association
1700 N. Moore St., Suite 2250, Arlington, VA 22209
An association for retail industry leaders that conducts advocacy, education and networking.
4651 Sheridan St., #470, Hollywood, FL 33021
A global nonprofit trade association specializing in consumer behavior research, customer experience design and in-store marketing technology.
World Alliance for Retail Excellence & Standards
PO Box 650713, Sterling, VA 20165-0713
A nonprofit trade association representing retailers, manufacturers and servicing companies involved in the in-store experience.
1. Krystina Gustafson, “Amazon just had its biggest sales day ever,” CNBC, July 13, 2016, http://tinyurl.com/
2. Lauren Thomas, “Amazon Prime Day breaks record; sales grew by more than 60 percent,” CNBC, July 12, 2017, http://tinyurl.com/
3. “Amazon.com Inc.,” Nasdaq, http://tinyurl.com/
4. Stephany Zaroban, “US e-commerce sales grow 15.6% in 2016,” Internet Retailer, Feb. 17, 2017, http://tinyurl.com/
 Emma Currier, Michael Shavel and Sebastian Vanderzeil, “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation,” May 18, 2017, Cornerstone Capital Group, http://tinyurl.com/
6. Emma Currier, Michael Shavel and Sebastian Vanderzeil, “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation,” May 18, 2017, Cornerstone Capital Group, http://tinyurl.com/
 Gene Marks, “More retail stores have closed in 2017 than at the same point in 2008,” The Washington Post, April 10, 2017, http://tinyurl.com/
7. Gene Marks, “More retail stores have closed in 2017 than at the same point in 2008,” The Washington Post, April 10, 2017, http://tinyurl.com/
8. Jackie Wattles, “Stores are closing at an epic pace,” CNNMoney, April 22, 2017, http://tinyurl.com/
9. Chris Isidore, “Retail bloodbath: Bankruptcy filings pile up,” CNNMony, June 13, 2017, http://tinyurl.com/
10. Kevin McCoy, “Moody’s: Number of distressed retailers tops total during financial crisis,” USA Today, June 9, 2017, http://tinyurl.com/
 Chris Isidore, “Sears has ‘substantial doubt’ that it can survive,” CNNMoney, March 23, 2017, http://tinyurl.com/
11. Chris Isidore, “Sears has ‘substantial doubt’ that it can survive,” CNNMoney, March 23, 2017, http://tinyurl.com/
12. Phil Wahba, “J.C. Penney Is Closing These 138 Stores This Spring,” Fortune, March 17, 2017, http://tinyurl.com/
 “Macy’s, Inc. Announces Actions to Streamline Store Portfolio, Intensify Cost Efficiency Efforts and Execute Real Estate Strategy,” press release, Macy’s Inc., Jan. 4, 2017, http://tinyurl.com/
13. “Macy’s, Inc. Announces Actions to Streamline Store Portfolio, Intensify Cost Efficiency Efforts and Execute Real Estate Strategy,” press release, Macy’s Inc., Jan. 4, 2017, http://tinyurl.com/
14. Makeda Easter, “Up to 25% of U.S. shopping malls may close in the next five years, report says,” Los Angeles Times, June 1, 2017, http://tinyurl.com/
15. Khadeeja Safdar, “J.Crew’s Mickey Drexler Confesses: I Underestimated How Tech Would Upend Retail,” The Wall Street Journal,” May 24, 2017, http://tinyurl.com/
16. Jeffry Bartash, “Consumer spending grew at five-month high in April,” MarketWatch, May 30, 2017, http://tinyurl.com/
17. Derek Thompson, “What in the World Is Causing the Retail Meltdown of 2017?” The Atlantic, April 10, 2017, http://tinyurl.com/
19. Courtney Reagan and Leslie Picker, “It’s more than Amazon: Why retail is in distress now,” CNBC, May 5, 2017,http://tinyurl.com/
20. Lauren Thomas, “The ranks of distressed apparel and specialty retailers are growing, Moody’s finds,” CNBC, June 9, 2017, http://tinyurl.com/
21. Travis M. Andrews, “America is ‘over-stored’ and Payless ShoeSource is the latest victim,” The Washington Post, April 5, 2017, http://tinyurl.com/
22. Lisa Eadicicco, “Apple Stores Make An Insane Amount of Money,” Time, May 18, 2016, http://tinyurl.com/
23. Thomas Barrabi, “Home Depot Crushing Sears and Other Struggling Retailers,” Fox Business, May 16, 2017, http://tinyurl.com/
24. Suzanne Kapner and Laura Stevens, “Sears to Sell Kenmore Brand on Amazon,” The Wall Street Journal, July 20, 2017, http://tinyurl.com/
25. Amy Wenk and Douglas Sams, “Evolving Atlanta Retail Industry Counters National Trends,” WABE 90.1, May 29, 2017, http://tinyurl.com/
26. Neha Thirani Bagri, “Apple thinks its stores can thrive while other retailers are dying,” Quartz, May 18, 2017, http://tinyurl.com/
 “Starbucks Espresso Journey,” Nendo, September 2012, http://tinyurl.com/
27. “Starbucks Espresso Journey,” Nendo, September 2012, http://tinyurl.com/
28. “Sarah Quinlan Senior VP, Market Insights, MasterCard – 2017 Global Retailing Conference” (video), TJL Center, May 15, 2017, http://tinyurl.com/
 Currier, Shavel and Vanderzeil, op. cit.
30. Currier, Shavel and Vanderzeil, op. cit.
31. “Cornerstone and IRRCi Publish Benchmark Report on Retail Automation,” May 18, 2017, Cornerstone Capital Group, http://tinyurl.com/
 Todd Bishop, “Amazon soars to more than 341K employees—adding more than 110K people in a single year,” GeekWire, Feb. 2, 2017, http://tinyurl.com/
33. Todd Bishop, “Amazon soars to more than 341K employees—adding more than 110K people in a single year,” GeekWire, Feb. 2, 2017, http://tinyurl.com/
34. Spencer Soper and Jing Cao, “Amazon to Create 100,000 New Jobs in U.S. in Next 18 Months,” Bloomberg, Jan. 12, 2007, http://tinyurl.com/
35. Michael Mandel, “Ecommerce job gains are much larger than retail job losses: Here’s Why,” Progressive Policy Institute, April 7, 2017, http://tinyurl.com/
 “Amazon Fulfillment Network,” op. cit.
36. “Amazon Fulfillment Network,” op. cit.
 Michael Mandel, “The Creation of a New Middle Class?: A Historical and Analytic Perspective on Job and Wage Growth in the Digital Sector, Part I,” Progressive Policy Institute, March 2017, http://tinyurl.com/
37. Michael Mandel, “The Creation of a New Middle Class?: A Historical and Analytic Perspective on Job and Wage Growth in the Digital Sector, Part I,” Progressive Policy Institute, March 2017, http://tinyurl.com/
38. Mitchell Schnurman, “From Amazon to Wal-Mart, digital retail is producing more jobs and higher pay,” Dallas News, May 29, 2017, http://tinyurl.com/
39. “How to prepare America’s retail workers for technological change,” The Economist, May 12, 2017, http://tinyurl.com/
 Currier, Shavel and Vanderzeil, op. cit.
40. Currier, Shavel and Vanderzeil, op. cit.
41. Treacy Reynolds, “Retail Industry Sees Slight Deceleration in Employment While Wages Increase,” National Retail Federation, June 2, 2017, http://tinyurl.com/
42. Alex Hern, “Amazon’s checkout-free physical shop ‘can’t cope with more than 20 people,’” The Guardian, March 29, 2017, http://tinyurl.com/
43. Paul R. La Monica and Chris Isidore, “Amazon is buying Whole Foods for $13.7 billion, “CNNMoney, June 16, 2017, http://tinyurl.com/
44. Matt Egan, “Grocery stocks are getting clobbered after Amazon-Whole Foods deal,” CNNMoney, June 16, 2017, http://tinyurl.com/
45. Nick Wingfield, “Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More,” The New York Times, March 25, 2017, http://tinyurl.com/
46. Ibid; Richard Kestenbaum,“Why Online Grocers Are So Unsuccessful And What Amazon Is Doing About It,” Forbes, Jan. 16, 2017, http://tinyurl.com/
47. Ibid.; John Gapper, “Amazon goes back to the future of groceries,” Financial Times, June 21, 2017, http://tinyurl.com/
 Kestenbaum, Ibid.
48. Kestenbaum, Ibid.
50. Zlati Meyer, “Get ready. Amazon-Whole Foods deal will change how you buy food forever,” USA Today, June 18, 2017, http://tinyurl.com/
 Wingfield, op. cit.
51. Wingfield, op. cit.
52. “5 Reasons Why Amazon Is Experimenting With Physical Stores,” The Associated Press/Fortune, April 28, 2017, http://tinyurl.com/
53. Brena Swanson, “Amazon quietly reveals possible expansion into real estate,” HousingWire, July 12, 2017, http://tinyurl.com/
 Wingfield, op. cit.
54. Wingfield, op. cit.
55. Walter Loeb, “Lidl and Aldi’s Aggressive U.S. Invasion Spells Trouble For Supermarkets,” Forbes, Sept. 27, 2016, http://tinyurl.com/
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