The retail industry is going through numerous changes. With more technology than ever before in this industry, companies are having to adapt to changing market conditions. There are many companies struggling to increase sales and profits. Sears is one of the best examples of a retail company that is struggling to survive. On a recent conference call, the company announced that it was closing more stores. Some business experts believe that it is only a matter of time before the company declares bankruptcy.
There are other retail companies struggling as well. The leadership team at Macy’s announced that the company is cutting several thousand jobs from the corporate headquarters.
Numerous customers shop online for the products that they need. This is a drastic change from just a few years ago. Companies like Amazon are taking away market share from traditional retail companies. Online commerce seems to impact companies based in malls more than other retailers. Instead of going to the mall, many people today would rather sit at home and relax. With the convenience of online shopping, few people want to go to physical stores unless they have to.
Some companies are increasing promotional activity in order to get more traffic from customers. However, this is a solution that will only work for a short period of time. By discounting the products sold at the store, companies will have lower profits.
In addition, many customers are not motivated by discounts unless they are drastic. Many companies are reporting that holiday sales are lower than last year. This is a trend where customers simply order all of their gifts online instead of shopping in a store.
Future of Retail
The retail industry is going to look much different in the coming years. Companies like Sears must drastically change the operating strategy for the future. Sears sells a lot of products, but few people enjoy the shopping experience in the stores.