Retail’s Next Challenge: Storefront Reduction
Retailers are attempting to reduce a nasty excess inventory issue in the U.S. The problem is national footprints need to shrink significantly. Consider that in the U.S. there’s roughly 48 square feet of retail space per person, compared to just 22 square feet in the U.K. and 13 in Canada.
Once considered a competitive advantage, high store counts are placing additional strains on retailers’ bottom lines. Consumer buying habits continue to be transformed by e-commerce, and that shift simply adds up to too many storefronts to meet the dwindling foot traffic.
Variations of an omnichannel strategy that utilizes stores in the online shopping process, are being tested, including product returns or pick-ups. Other retailer strategies involve plowing expected savings from store closings back into an e-commerce effort, or creating digitally-enabled stores. Even so, retail analysts argue the burden won’t lift without further closings.
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