To Survive COVID, Retailers Need to Embrace Creative Destruction

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“Excess Stores Trigger Shakeout In Overbuilt U.S. Retail Industry.”

There’s a headline that won’t shock anyone who hasn’t been living in a shack in a remote forest in Alaska for the past year or so. Everyone who follows the retail world knows that America began the pandemic with an obscene amount of space devoted to retailing: 23 square feet per capita, the most in the world by a long shot. (Canada was second with 16 square feet per capita.)


But guess what? That headline appeared in 1997, almost a quarter-century ago, when long-forgotten anchor brands like Montgomery Ward and Woolworth’s were going out of business and century-old Sears was still one the nation’s top retailers.


Fast forward two decades to 2017, the peak of the “retail apocalypse,” and we find this headline: “Retailers Built Too Many Stores And The Bubble Is Bursting.” That was when companies such as Toys “R” Us and Payless Shoes were filing for bankruptcy after failed expansion plans.


And then this headline, from April 2021: “Retail Market May Be Overbuilt to the Tune of 1 Billion Square Feet.”


The news in the retail industry these days is focused on the details of “dead malls,” the bits vs. bricks debate, return strategies (by mail or in-store), supply-chain issues, store layouts, reducing waste, and the ever-proliferating micro-channels that marketers must sort through to try to reach their customers.


The pandemic changed everything, but it has yet to jolt the industry as a whole into dealing with the overarching problem that success in retailing is, like all capitalistic endeavors, an ongoing process of creative destruction.

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