It’s hard to tell if the world of retail has become a jungle or its on its way to becoming a wasteland. Competing with the internet has drastically changed the retail experience and what people look for when shopping. In Saskatchewan in particular, the appeal of shopping online and having things delivered is hard to dispute. Our extreme weather and vast distances lend themselves nicely to the idea of clicking on an item, hunkering down and waiting for it to arrive within days.
As the population becomes more comfortable with online shopping, and as smaller retailers adjust quickly to the evolving technology of online shopping, it’s making it hard for entrenched businesses to survive. Retail giants have been falling hard and fast to nimble, online, global competitors. The latest major announcement sees Sears, a giant in Canadian retailing, pulling the plug and shutting their doors for good after years of trying to turn their fortunes around. The end of Sears Canada means the loss of 12,000 jobs and the closure of 133 stores across the country, just as the holiday shopping season begins. Merry Christmas, indeed.
Paying wages, leases, equipment costs, inventory management and convincing people to travel and park are real concerns for the retail industry. Running an electronic store has become cheaper, safer and easier than ever before thanks to commercially available software such as ECWID, Shopify, Woo Commerce and Squarespace. These readily available tools often integrate with payment gateways and shipping modules to make it easy for people to get online and sell their goods and services.
Right now, it’s a good time to be ‘the little guy’ if you just want to get your products to market—but it’s creating a huge shift in the industry. The Retail Council of Canada listed some top shopping mall trends in their Canadian Shopping Centre Study—and the majority of them focused on the customer experience.1 With convenience, safety and comfort being provided by online shopping, retail malls have had to shift their focus to providing something the internet can’t (yet) provide—a tactile experience.
This has lead malls across Canada to focus on entertainment. They’ve invested significant dollars across the country, mixing cinema, restaurants, and exercise facilities to give customers as many reasons as possible to visit their physical stores. Retail shopping centres are investing and adapting—betting that they can adapt to these changes and continue to be a key component of the Canadian retail landscape.
While small businesses thrive and shopping centres scramble to adapt, the speed of adoption is a tough thing for giant retailers to adjust to. Many of these companies are large, established companies spread across the globe with physical locations and huge overhead that make it extremely difficult to adapt to the evolving shopping experience.
The current undisputed king of retail, Walmart, is unsurprisingly focused on continuing their commercial success by adapting. The consumer giant—with revenues of nearly $500 billion per year, over 11,000 physical locations and more than two million employees worldwide—has committed to ensuring they remain relevant as retail increasingly becomes more online focused.2 They’ve committed millions of dollars into expanding their online offerings and blending the experience of retail and online shopping to keep their brick and mortar stores operating and their place at the top cemented. It’s advice other retailers didn’t move on quickly enough, as evidenced by the rash of closures by major retailers. In Saskatchewan, we’re waving goodbye to Sears, following behind recent victims HMV, Danier Leather, Ben Moss Jewellers, and of course, Target’s ill-fated Canadian experiment.
The shift is real and while quick reactions and anticipation of change will be required, the long-term impact on the overall industry may not be clear for some time. Meanwhile, local retailers like Leah Sutton of Ceilidh Surprise in Regina are making big decisions about the future of their business. “The internet has had a huge impact on our business,” says Sutton. “We’re currently moving our retail location to a space that is half the size of our existing store, but with better warehousing space so we can handle online orders. With the success of our online business the large retail footprint doesn’t add as much value as the warehouse space does.”
All hope is not lost in the traditional retail space. It’s simply doing what businesses have always done: identifying opportunities and adjusting their focus to what customers want. The problem comes when companies are slow to see the change that’s right in front of them. Just ask Sears, who had a built-in ‘shop at home’ audience for decades with their catalogue business, but failed to convert to web. Or Blockbuster Video, who failed to see the opportunity in Netflix years ago. The trick is staying nimble and being where your customers are, whether online or in-store. There’s a unique opportunity here for the retail industry, and it will be interesting to see who gets ahead, and who is next to fall behind.