6 Grim Realities Facing Today’s Retail Stores

While many of us are living, working and existing at home, retailers and the companies that depend on them are in big trouble. People in the U.S. love to go out and shop, and they just can’t do it right now. “The U.S. is a consumer-driven economy, and 65% of our Gross Domestic Product or GDP is consumption,” says Wharton management professor Mauro Guillén. Due to the coronavirus pandemic, however, consumers are restricted from leaving their homes. Many Americans have lost their jobs or experienced reduced pay, so they don’t have the money to go shopping, either in person or online. And physical retail stores and malls are closed tight.

Consequently, the retail industry just reported the sharpest one-month drop in retail sales on record. The U.S. Commerce Department on Wednesday said retail sales plunged 8.7% in March, the biggest decline since the government started tracking the series in 1992, after falling by a revised 0.4% in February.

Barbara Kahn, a Wharton marketing professor and retail expert, recently joined the Wharton Business Daily radio show on SiriusXM to talk about retail’s grim reality. Here are 6 of her key takeaways:

Retail is reeling. “Most retailers were not set up to pivot to a 100% e-commerce world. Even though we saw a big growth in e-commerce, as much as 80% of shopping is still done in physical stores. Those physical stores are all closed. Even those that are doing well like Walmart and Amazon because they were well positioned for the e-commerce part of it [are having problems]. Amazon is only doing essentials and has concerns for the health of its workers. It’s not a clear win for Amazon. It is the same for Walmart, which is taking a very risk-averse approach.”

Inventory overload. “Inventory is sitting in physical stores unsold. They can’t just take that inventory and put it into warehouses and have it delivered. They don’t have the workforce and the systems to change that. Which means they have all this inventory from quarter two [April 1-June 30] that they have to do something with. You’re seeing massive discounts from favorite retailers with these very deep discounts to try to get rid of inventory.”

Holding on for the holidays. “Quarter two and quarter three are going to be difficult. These retailers are going to have to plan for a successful quarter four, the holiday season. The problem with retailing is that it is so seasonal. You have annual costs: annual employee costs, annual rent costs, annual supply chain costs, but you make the bulk of your revenue in the fourth quarter. That is really the make-or-break quarter, and many retailers are doing planning six months in advance.”

Supply chain effect. “Retail is a very big industry sector for the U.S. What’s happening to the brands that are providing the inventory that is sitting on the retail shelves? That hurts the apparel industry. Then, who makes those brands? That goes to the manufacturers…It’s not a good situation.”

Sad shoppers. Before the coronavirus, “retailers were finally getting the idea of what physical shoppers wanted in this new world where e-commerce was taking a strong position. The new Nordstrom that opened in New York City was a fantastic retail establishment. Nike withdrew from Amazon and other wholesalers [and opened] fantastic, amazing stores. They were delivering real customer value. For someone like me who loves to shop and loves retailing, this is a really sad situation.”

What tomorrow brings. “A lot of people are saying that now that everyone is shopping online, does that mean that everyone will start shopping online? Some of the people who weren’t shopping online now see how easy it is…I think when people are cooped up in their houses, they’re going to be excited to run out and go to stores. A lot of what people think is fun about living in a town is a Main Street or living in a city is all that exciting retail and restaurants. It might make sense for government or private individuals to help support the retail sector, because it brings so much quality of life to our cities and our small towns. If we could do something to keep those establishments still in business, I think the smart, savvy retailers who understand what customers are going to crave in physical shopping can still survive. There are a lot of ‘ifs.’”

Conversation Starters

Barbara Kahn says that pre-crisis "retailers were finally getting the idea of what physical shoppers wanted in this new world where e-commerce was taking a strong position." Do you agree with this? Have you visited Nordstrom in New York City or new Nike stores? Any others? How are they figuring out how to cater to shoppers in-store? Use the Related Links to further explore this topic.

Malls are closed! How do you think mall shopping will change after the coronavirus pandemic? Will there be a new business model and, if so, what will it look like? How would you like it to change? Share your vision of the mall of the future.

This idea that so many more people are discovering online shopping is interesting. Are you one of them? Your family? Have you started to order groceries online? Where do you fall in the post-pandemic reality for retailers? do you think more people will continue to shop online or will they rush to physical stores after long months of isolation?

15 thoughts on “6 Grim Realities Facing Today’s Retail Stores

  1. I’m definitely interested in all the ways the world will change for retail. For example, standing 6 feet apart in line when we visit the grocery store, having gloves available at the door and other new systems introduced during these challenging times. I believe that some of these are cleaner and healthier and may permanently become best practices. We’ve been conditioned for this new way of shopping and we may not want to give that up so easily. I’m also curious about the impact the current retail crisis will have on logistics — fulfilling orders and delivering to consumers. In the radio interview, Barbara Kahn also talks about how “the last mile” is a challenge for all retailers. This refers to the last mile of getting products from the store to the home. It makes sense, she says, for the consumer to bear the cost of the last mile. Will this crisis help retailers to figure out how to better implement last-mile logistics and save on costs? What lessons will retailers take away from this experience?

    1. Diana, I agree with your insights on the new logistical situations that we will face post this global health crisis. I too am keen to see how simple and routine parts of our lives like going to buy groceries will change due to COVID-19. Maybe for the better, one might add, as hopefully a key takeaway will be to encourage better hygiene at all times. However, the prospect of social isolation for a prolonged period of time will certainly be challenging for all of us and definitely for the retail market and we might start to see players within it start haemorrhaging money like never before.

      Your comments on the ‘last mile’ and the article both point towards the different solutions we have in today’s world of buying goods. As mentioned in the interview, some big companies had established strong delivery networks but it seems as though smaller players will really suffer from the sudden spike in the demand for online shopping – although this trend has been increasing for the past few years, the article suggests that still 80% of shopping is done in stores, therefore the spike will hurt companies unprepared for a black swan event.

      Interestingly, at my home, we have tried online shopping for basic groceries as it reduces outside exposure however the massive increase in demand coupled with the added safety regulations and increased precautions companies are placing to ensure the safety of their workers has made it impossible for household goods to be ordered online without a significant waiting period. Therefore, there is still relatively high traffic in physical stores, although as you mentioned the social distancing measures have certainly been eye-opening and intimidating.

      Your question of what retailers will take away from this experience is something that I am looking forward to see as well. Post this crisis it will also be fascinating to see the day-to-day changes in our lifestyles and how we interact with others.

      1. I concur with Diana’s sentiment regarding permanent retail changes post-virus. I believe this pandemic will spur innovation in recent retail trends, especially when sellers inevitably must bridge the digital divide between online and physical shopping as the rest of the world modernizes. In other words, this trying time will incentivize companies to begin serious investment in digitalizing the customer experience, giving rise to technologies many have chosen to ignore for years.

        Firstly, retail enterprises can look towards present-day sales to realize the lucrative benefit in eliminating “the last mile.” Although many stores are experiencing unprecedented demand loss, Target, a retail giant that has struggled for years in grocery, has witnessed a meteoric rise in grocery delivery. Amazon’s grocery business is handling too much demand, with not enough supply to keep up. My own English teacher, a senior with an extremely at-risk spouse, has not set foot outside of his street since we cancelled school in March. Grocery delivery, originally a niche market only for the wealthy, has found a new consumer base with the elderly, medically pre-conditioned, and lazy. Texas-based grocery chain H-E-B has begun their own delivery service to take advantage—expect many more stores to follow. In a consumer-focused economy already saturated with on-demand entertainment in Netflix and Disney and on-demand food in UberEats and DoorDash, I would not be surprised to see grocery delivery sticking around for decades.

        Secondly, I would expect the extinction of the credit and debit card. Many modern consumer economies have already switched entirely to phone-based payment. In my most recent trip to China, I visited relatives in Hangzhou, a tech company-concentrated area home to Ali Baba, Wuhan, a trade and transportation city, and Zhuji, a rural town. From the moment our cab driver used his phone to pay the airport road toll fee to buying local delicacies in Zhuji, I never observed any cash or card transaction: Everything was completely digital. Even Wuhan’s homeless held up signs with QR codes that you could scan and send money to. This was four years ago. Turns out, China’s economy developed so fast the cash-wielding population skipped over the credit card era and immediately began using their cellular devices. However, the U.S. has never caught onto this digital trend, partially due to public distrust of a digital company possessing one’s wealth. Phone-based payment has existed for years in Apple and Google Pay, but many have only seen it as an interesting gimmick. With many Americans realizing how many germs travel on cash and card, more stores will probably begin integrating payment methods that only require the wave of a phone.

        Finally, cashier-less shopping may have just found its big break. Although Amazon Go and Sam’s Club Now have experimented with moderate success for years, no situation has quite invited their expansion as the one we have now. A physical store where one can enter, grab necessities, and exit without a second of human contact is exactly what consumers are seeking. These stores are especially attractive because the smartphone-activated automated doors that guard them are always perfect for maintaining an exact number of people inside. Moreover, Amazon Go’s absence of a checkout line will only shorten the amount of time one needs to spend in a physical store. Coupled with widespread smartphone-only payment methods, we could be staring at the future of retail itself. Long gone are the days of receipt-signing, awkward customer service, and waiting in line for checkout.

        Stores without cashiers will require less employees to maintain, another reason I believe companies will bridge the digital divide. I am personally curious how the economy will react to unemployment following the integration of these trends. Will those workers be reintegrated into retail supply chains? Will retail wages finally go up? This pandemic has exposed a few unsustainable trends that have plagued retail for years—I am excited to see how companies will rise to meet it.

        1. Hi David!
          As an individual who travels almost annually to mainland China, I completely agree on the fact that mobile payment methods have become widely popular. While the rise of this method in China was largely due to its convenience (both in terms of speed as well as not requiring consumers to carry a physical wallet), I can certainly see a global application of mobile payment methods as a result of the COVID-19 pandemic.

          While payment methods such as Apple Pay have been present in the United States for years, I have rarely seen consumers use similar applications prior to the COVID-19 pandemic. As you stated, I also believe that this pandemic may very likely lead to greater awareness in the aspect of consumer hygiene. Systems such as Apple Pay may become much more widespread in the future.

          Another developing issue I am interested in is how the COVID-19 pandemic will shape relationships between nations in the years to come. For instance, the United States signed a phase one trade deal with China. However, the economic consequences and trade restrictions as a result of the pandemic may affect international trade in the long-term. This is coupled with the blaming “game” that has recently “erupted” between China and the United States. Many in the United States have been adamant in making China “pay” for the consequences of the pandemic, while rumors which state that the United States brought the “coronavirus” into China are present within the population. With the Trump administration cutting funds to the World Health Organization, I am both curious and concerned as to how nations will view each other after the COVID-19 pandemic is under control.

      2. Hi Kavish!
        I like your idea about how this new normal of e-commerce is “eye-opening and intimidating”, and I believe it applies well to business owners. I got a chance to speak with a local business owner while doing phone banking for Josh Gottheimer, and he discussed his struggles of adapting to an online world. He was around 65 years old, so his willingness to transition was low. This connects to another recent KWHS article about the next generation helping older people succeed in a digital world. Since the pandemic threat is forcing mom&pop shops to transition to a digital world, it only seems right that we make a congregated effort to help businesses survive and adapt.

        1. Hi, Charlie, I agree with you 100% on helping retail business, especially places like malls, survive and adapt after the pandemics is over. I was never interested in shopping in malls before as I feel I can purchase everything online. However, I know the mall is my 74 year old grandmother’s favorite place to visit. She met her friends there and she enjoyed taking a stroll, browsing through sales items and eating at the food court. It was a big part of her social experience. Sadly this pandemics took that away from her. Fortunately she is healthy and safe now, but she can’t shop online like my mother and sister do during the lockdown because her eye problem prevents her looking at the screen for an extended period of time. It is important for our generation to help older people adapt to digital world, yet I feel my grandparents generation prefer the social settings much more than the virtual settings. They need the social connection to extend their longevity. Therefore we need to help these brick-and-mortar stores to survive. It is bad enough that they are worried about their friends’ lives in the nursing home during this challenging time, we need to make sure that they still have a place like malls they can visit and hang out after we can return to normalcy post coronavirus. Changes are good for our generation, but we must also make sure that my grandparents’ generation can maintain good quality of social life in their retirement.

  2. The future I see for malls is an experience-based environment. The reason why people went out to shop or visit a mall was because the human interaction implied on the action. People enjoyed human contact, enjoyed the status given by entering certain stores or leaving Macy’s with a big bunch of bags and being awed by everybody around them, all this things cannot be replaced by online shopping. While buying online the only interaction you have is with your computer, the delivery man (whose are also disappearing nowadays), and maybe your mom/boyfriend/dog (who actually live with you). Everybody is now realizing that what they actually liked about going shopping were not the products they were purchasing, but the experience linked with it. It’s not the same going to a Gucci store and receiving all the attention from the store assistants, than just clicking a button, pay out a couple thousand dollars and receiving it 2-3 days after.

    In conclusion, malls and stores have to take full advantage on that after the whole pandemic situation goes off. Experience-focused stores will succeed more than the ones that just want to get rid of they stock.

    1. Hi Paulina. I agree with your comments about experiential shopping. People are craving that kind of in-store, accessible experience (who doesn’t love the loud music at Hollister?). As people return to this kind of shopping after the threat of coronavirus has subsided, stores have a real opportunity to attract and dazzle new loyal shoppers with in-store innovations. I hope retailers are feeling inspired to think about them now so they are ready when we hit the malls!

  3. These are unprecedented times for the retail industry. Supply is soaring while demand is dwindling. Nearly “80% of shopping is still done in physical stores” and now that the physical stores are closed, retailers are suffering a major blow. It is imperative that retailers continue to attract those customers who prefer shopping in-person or else succumb to the demand-side shock caused by the COVID-19 pandemic, filing for bankruptcy such as J. Crew and Neiman Marcus.

    Before a solution can be created, we have to understand the user and apply design-thinking. The users are the 80% of customers who prefer to shop in physical stores. Despite the prevalence of online shopping, many choose to shop in-person because they enjoy the experience: listening to the music, seeing the clothes, and trying on the clothes. Some may feel online shopping is too complicated. Others want to avoid the headache and hassle of scrolling through the tens of thousands of items. Whatever the cause, we establish that these customers prefer the comforts of a brick-and-mortar store to an e-store. The question now becomes how a retailer can improve the online shopping experience for in-person shoppers to enjoy an online alternative.

    I introduce to you, the Virtual Store. The Virtual Store changes the game when it comes to online shopping. It combines AR and gaming technology to bring the physical store to the customer via a computer. This solution focuses primarily on clothing retailers. When on a retailer’s website, there will be a “Go to Virtual Store” option. When this option is selected, customers will be transported into the virtual store, which has the same layout as the physical stores, plays the same music, has the same tables with folded clothes, racks with hanging clothes, and mannequins. It will feel the same.

    Retailers can utilize virtual room-design software to create the scene of the virtual store and maintain the retailer’s aesthetic. To create the appearance of clothing hanging from racks or folded on tables, retailers take a picture of an item of clothing either folded or hanging during the item’s photoshoot. Then, this image will be cropped accordingly to remove the white background and placed into the virtual store.

    Upon being transported into the store, customers can create and customize their avatar to make it look like themselves: choosing the gender, height, weight, hairstyle, etc. Afterward, customers will be brought into the virtual store, experiencing it in either a first or third-person perspective. It will be as if they were there. They can look around by dragging the screen or moving the mouse. They can walk around the store using the arrows on the ground, the arrow keys on their computer, or by double clicking in a certain direction

    The clothing in the store will be based on the customer’s preference. The customer can choose any category on a retailer’s website (new arrivals, best sellers, jeans, etc.) and transform the virtual store into only containing that specific type of clothing. This way, instead of scrolling through the countless pages of items, they can merely walk around the store and see everything for themselves, headache-free. For example, if the customer is only looking for sweaters, he or she can click that setting and the entire store will only be filled with sweaters. The mannequins will also be dressed to communicate the retailer’s recommended style to wear certain sweaters.

    The only other person in the virtual store will be an employee that essentially serves as the “live chat with an expert” button on many websites. The customer can ask the employee any questions that he or she may have.

    It is crucial that the virtual store emulates the foremost characteristic of shopping in-person — trying on the clothes. When customers walk around the virtual store and see an item they like, they can click on it and the typical item page (pictures, size chart, review, etc.) will pop up. From there, they choose a size and have the option of either adding it directly to the cart or bringing it to the fitting room.

    If brought to the fitting room, the customer has two choices: put the clothes on his or her avatar, or turn on their computer camera and try it on through augmented reality. For the first option, the customer will be able to rotate his or her avatar 360 degrees and in any direction to see all the angles. For the second option — AR — the customer, aided by “move closer” or “move farther away” directions from the screen, will have to stand a certain number of feet away from the computer screen. Once this distance is reached, AR will be used to place this item of clothing onto the customer and he or she will be able to see how it looks, fits, and moves.

    Since a key part of a physical store is to touch and feel the clothes, two new scales will be available for customer reviewers to rate an item of clothing — texture and flexibility. The scales will range from soft to rough and flexible to rigid, respectively. Per usual, only verified purchase customers will be able to rate an item on these scales.

    A virtual store permits a retailer to add more features that will focus on a customer’s interests, wants, and preferences. Before entering the virtual store, customers will have an option of taking a “style quiz” that helps determine their specific style, generating a recommended page of the retailer’s clothing items that suits this style. “Recommended Page” is also a category, like “Sweaters” or “Best Sellers”, that customers can fill the virtual store with.

    Having a virtual store is the solution to the problem. The 80% of customers that seek out the physical store can experience the same feeling at home. They can relish in the joys of clothes shopping without being constrained by the closure of physical stores. It won’t even feel like they are online shopping.

    COVID-19 has only accelerated the closure of malls and physical stores across the country. The fall of the physical stores was imminent. The loss of profit was imminent. However, a virtual store will render a majority of physical stores obsolete, allowing retailers to save hundreds of thousands of dollars by voluntarily closing them before they are forced to. The retailers who take losses on physical stores to increase brand awareness can shift advertising to social media, a much cheaper and wider-reaching alternative. They can establish a large presence on Instagram, for example, and sponsor brand ambassadors like social media celebrities to further increase brand awareness. A portion of the hundreds of thousands of dollars saved can be reinvested into this new form of PR.

    Retailers who do this will be ahead of the curve. The only physical stores that should be kept are the most profitable locations. These scarce physical stores will become a sort of attraction, much like the Starbucks in Pike Place, for customers and tourists, establishing the retailer as an in-demand company and increasing the tourism for the city the stores are located in.

    Retailers will be able to survive the pandemic. The virtual store will provide a seamless transition from physical to online shopping and, most importantly, maintain a retailer’s normal level of profit. It will help the struggling retailers who incurred countless losses in resources get back on their feet after the pandemic. They won’t have to wait months to regain their resources and can use this tool as an intermediary. While the recovery effort may be slow, implementing a virtual store will benefit all retailers, no matter how large or small. They will be better equipped to survive the pandemic. They will thrive after the pandemic in an increasingly technologically-advanced society.

  4. In an era where technology is becoming ever so prevalent, a number of retailers have been seeing a decline in the customer demand for physical stores. These days, technology is replacing the necessity to physically venture out to a store and purchase items because the average consumer can simply purchase the same items through the click of a few buttons and some entering of personal information. This growing trend in the market is for the better, as society should naturally become more advanced technologically year by year. However, this is not to say that there aren’t any drawbacks, as the nostalgic feelings older individuals have about taking a drive to the toy store will never be the same.

    It is no surprise that shopping malls across the world have been shut down for the time being, unless you truly are living under a rock. As a result, the notion of driving to the local shopping mall to pick out your favorite name brand clothes with friends may forever be altered. This is where the prevalence of technology comes in. In a post-pandemic world, I envision the typical shopping mall to include a variety of social distancing measures in place: shut down play areas, plexiglass windows enclosing cashiers, and a number of markers to represent the acceptable distance between customer to customer. There will be a new business model, and I predict that it will not be solely based on an online/offline experience. Instead, there will be an integration of the two, and apps for specific stores will be used on a more frequent basis.

    The notion that one can shop online is still a growing idea that individuals across the world are only beginning to realize exists. As a high school student who is extremely tech-oriented, I have always been using online e-commerce platforms to buy or sell items. On the other side of the spectrum, however, my older relatives are only beginning to understand more and more of this already exploited industry and are taking progressive steps to familiarize themselves with this new technology. I predict that there will be a handful of people that will rush to physical stores once the pandemic is over, but most people will continue to shop online because of the lasting effects of the coronavirus.

    My solution for struggling businesses around the world is an app that allows its users to securely donate as much money as they desire specifically to small businesses in local communities. This app would allow users to input their zip code and they would be matched with a number of stores in the area. Users could also leave reviews and lasting comments that would detail the businesses’ best features and moments they had while they were still in operation. This feature would entice other users to help the overall cause of supporting local struggling businesses. The application could constantly be improved by its developers and could use a database to store all of the input from the users. In addition, this app would allow users to directly purchase gift cards from individual stores to help local businesses with their cash flow.

  5. One of the major problems that Barbara Khan brought up in this article was that many customers wait and hold out until the holiday season, when everything is on sale and they are buying gifts for others to actually spend any money. Most companies expect to make their revenue and profit in quarter four, but production, employee, and rent costs are all annual. Unfortunately, this issue is extremely difficult to change since this buyer mentality is built on decades of tradition. It doesn’t help either that most retailers and companies know about this mindset and only have large sales during the holidays. What we can change in the status quo, however, is the problem with inventory overload and competition with e-commerce.

    One of the deciding factors between a successful retail store and a failing one is its management and control over inventory. A company with too little inventory is not going to be able to maximize its profit and will lose customers, while a company with too much inventory is wasting money on purchasing inventory and will have no choice but to put the items on sale. The way many retailers actually determine how much inventory to buy is based on its sales in previous quarters and years. Usually, a more seasoned and experienced retailer will have a better guess at how much inventory to buy over a new one. The way for many retailers to have a better guess at how much inventory to buy is to have a government or city offer a census for the town or city surrounding the retailer. When the government sent out a census this year, it put a lot of people in panic and confusion. The last one was 10 years ago—many people probably forgot about having to do a census. If instead the government or city sent out a census for its residents to complete every year and shared some of its information with the retailers, then the retailers will have a much better understanding of how much inventory to buy based on the information.

    The next major problem with in-person shopping is that it’s not as easy as e-commerce. Most people are quick to point out that the solution for retailers to combat e-commerce is to work on and improve what makes people want to go out in the first place. Improve your shopping quality and services while people are in the store. However, I think it’s more than just that. Retailers have to innovate. They can’t just try and try to do the same thing over and over again hoping that shoppers will want to shop at their stores. E-commerce is evolving constantly. From 360 degree views of 3-D models of the product to drone shipping, e-commerce is showing consumers what is possible and is keeping the consumers interested. What retailers have to do is to come up with new innovative and creative things to add to the shops in order to attract new customers and keep old ones coming back. For example something e-commerce cannot provide is offering tangible objects like real stores can. If retail stores provide some sort of service where they show off how the object or clothing was made, maybe like a museum, that is bound to attract customers because they get a “show” at the same time as being able to buy the merchandise. Another reason why many people still decide to buy things outside is because they get a feeling of instant gratification. Most of the time, when people want things, they want it there and then. That’s why I would prefer to buy a pair of sneakers in the actual store rather than online on a website. If retailers learn how to play around and manipulate this natural human feeling, they can retain their customers.

  6. Although there has been a significant rise in e-shopping in recent years, it is clear from this article that the vast majority of consumers prefer to buy clothes in physical stores. In fact, this number is as high as 80%! COVID-19 has created an unprecedented situation for retailers where at the moment, many consumers globally aren’t allowed to physically enter stores or malls. However, it is also clear that consumer behaviours are going to change drastically and even after the pandemic passes many people will feel uncomfortable stepping out for long periods and trying on clothes that others may have tried before or even simply interacting with them in a small environment. The article stresses that although retail stores are important in numerous ways, there must be an accelerated shift towards improving the e-shopping user experience.

    However, it is virtually impossible (ignore the pun) to expect retailers and especially smaller businesses to be able to rapidly improve their websites or interfaces in this time period. Not only is it incredibly challenging to devise new ways of improving websites but it is also costly. Therefore, I propose the brand-new, revolutionary, mind-blowing ‘One Stop Shop’ interface. To explain the need for this new product I first need to lay out the current problems with the e-commerce experience. In my opinion, while physical stores do carry advantages such as being able to try on the clothes, it is the relative hassle of the online shopping platforms that drive consumers towards the brick and mortar stores, rather than their own merits. Firstly, especially for the older generations who are not as accustomed to using technology, but even for the rest of the population, the online shopping websites are very difficult to navigate. I have done some research here and the results may shock you. For this case study I used the renowned brand GAP, who are known to have a relatively good website. On the home page of the website there are 11 main headings such as Men, Women, Baby, etc; not too bad right? The real headache comes after you have clicked on your option. After crunching some numbers, I discovered that on average there are a further 26.5 sub-headings on each option. In the Men category for example this ranges from ‘The Slim Shop’ to ‘Activewear’ to ‘GapFit and Active.’ This makes the transition for a first time online shopper incredibly confusing as in the physical store they have the ability to walk around and check out each option whereas on the online store opening up 26 new tabs can feel a bit overwhelming. Furthermore, it also may negatively impact the consumer who knows what they want as there are many options to click through and even at the end ‘Activewear’ is not incredibly specific. For a consumer who wants blue activewear shorts they will still have to end up scrolling through the section or applying extra filters, all increasing the hassle of the experience. This ties in to another way in which online shopping may be painful: the amount of options. The amount of product variety can clearly be seen on the e-store rather than physically as it is a pain to be scrolling through multiple tabs if you are just browsing and do not know exactly what you want to buy. Finally, e-shopping is also a nuisance as there are so many retailers to choose from. When walking through malls or streets you are able to look into the shop windows or quickly peek inside whereas, in the e-shopping sector you pretty much have to know which store you want to buy from in order to be able to visit their website in the first place. This adversely impacts smaller retailers who are not as well-known and therefore their websites gain little traffic.

    The One-Stop Shop hopes to eradicate all these issues, shown by the product’s motto: ‘Simplicity. Simplicity. Simplicity.’ It is essentially an all in one user interface. The first step for shoppers will be to add any companies they know of that they have purchased clothes from or have liked their products. These websites all go into the preferences portion of the user’s profile. Of course, this can later be changed. Furthermore, similar to a Reddit ‘upvote’ style system, there will also be a small section showing brands that are trending or have got a quick influx of positive reviews so that you, the user, can gain awareness of brands that you have never seen before. This acts to help smaller businesses. Full disclosure, the initial step may take a little while as we will ask the consumer to sign in to these websites with their existing account so that our one-of-a-kind analytics program can use their ‘previous orders’ tabs to quickly identify their preferences. This is where we make e-shopping easier. Rather than having to scroll through options and click many times just to get that certain pair of shorts that you like, the first screen displayed to you once you click the ‘Start Shopping’ tab will be images, pulled straight from the websites, of all the clothes that fit your preferences. The program sifts through all your previous orders and any extra preferences you may have added and shortlists products from all the websites you have chosen. The program uses the common type of garment itself that you purchase, e.g. if you have purchased many shirts the page will display more shirts than any other type of clothes, the previous colour schemes of your purchases, the style of the clothes (e.g. with text or logos or without them), and finally your preferred sizes for each type of garment to create a page of clothes that YOU like. In some cases there may be users who don’t like some of the goods presented to them. In this scenario all you have to do is click the red X button located on the top left of the product’s image. Not only do you not have to see this product anymore but our smart machine learning technology takes that into account and starts to learn more and more each time that button is clicked and after a while will hopefully only show you goods that they are certain you will love. Furthermore, it is even easier now to compare the prices and look of two similar products from different websites as they are adjacent to each other on our platform! Therefore, you are able to see products you will like from numerous websites and manage to avoid the hassle of scrolling for hours to see them. I know, its crazy.

    Disclaimer: we are working on introducing a price comparison mechanism but are worried it may take away from our motto of simplicity – any feedback would be appreciated.

    We, the One-Stop Shop team, believe that not only does it incredibly improve the user’s experience of online shopping but it helps producers too as they don’t have to spend a great deal on improving their websites as well as also showcasing their goods for a wider variety of people that may have never even come across their brand. In all seriousness, consumer behaviours are likely to change and the demand for e-shopping is likely to continue to rise. Many retailers are not prepared for this and some consumers may be delaying online shopping due to the associated hassle. However, it is inevitable that most people will online shop as a direct result of this crisis and this mechanism helps this process on both sides.

  7. Why are retail stores failing?

    It is easy to blame an unprecedented global pandemic, one that no one could have foreseen nor feasibly prepared for. But I believe the coronavirus outbreak is simply an indicator of unsustainable retail practices that have persisted for years, not the root cause.

    In my hometown, Dallas, Texas, retail giants Neiman Marcus and J. C. Penney have both recently filed for bankruptcy. But it’s not that these companies were doing great until the virus sent everything crashing down. Retail has been doing poorly for years; coronavirus is the nail in the coffin. Although J. C. Penney was one of the first retail companies ever to begin selling online in the early 1980s, the former goliath has yet to post a single robust quarter in the last ten years. This trend indicates that although online stores and reimagined virtual experiences might benefit some stores, retail companies seeking longer-term longevity should not try to model others but instead play to their strengths.

    Simply put, online shopping will not save everyone. Think about it: Have you truly felt compelled to go shopping for clothes during this time? In general, demand for retail goods is generally lower because most people are staying inside, which means there is no reason to go out and buy any nonessential goods. As a retail specialty store, it makes no sense to invest money and time into a virtual platform; instead companies should begin to use this time to reconsolidate, remodel, and reimagine. In other words, enterprises should be less concerned about money they lose now and more focused on regaining lost revenue when this lockdown fades and the holiday season begins.

    This article clearly flags a shift to e-commerce as a costly trap: If well-established online retail giants like Walmart and Amazon are suffering in non-essential sales, why should a business with no e-commerce expertise expect any financial gain from that route? A retail store with no business in the online world investing in virtual measures now will likely find no substantial increase in sales and a lot of wasted resources. The biggest reason retail stores are failing is NOT because lockdown measures prevent shoppers from visiting stores, but because lockdown measures take away any reason to visit a Neiman Marcus or a J. C. Penney store in the first place. Putting your merchandise on a website won’t change that fact.

    Retail giants need to keep their eyes forward and plan for ways to regain lost ground. A short-term fix will come at the expense of long-term sustainability. And this article already gives some ideas. Because many stores are closed anyways, now is a great time to carry out a large-scale remodeling that can correct for the reasons why retail was collapsing even before this pandemic. Nordstrom and Nike’s recent transitions prove that a retailer can thrive without Amazon or any online platform, but that transition demands a refocusing on the customer experience, not the merchandise. Stores should seek ways to innovate the in-person experience—whether that is repurposing shelves into showrooms or creating a new experience altogether remains to be seen.

    Businesses can also experiment with stores that can reopen during this time. Amazon’s cashier-less project, Amazon Go, can be an intriguing way to reopen under quarantine conditions. Because a shopper’s experience requires zero physical human contact and the number of people in a store can be limited, a cashier-less location can help bring back that in-person shopping experience that is truly required to save retail. And once this virus passes and the holiday season arrives, companies that chose to use this time to invest in revitalizing their stores might find them even more packed than before.

    The supply chain and inventory issue will persist. But this is an issue that is inevitable, no matter what retailers choose to do. Even 100% online companies are suffering the same problems because there is no demand. But I believe accepting that loss now and preparing for a comeback quarter later in the year will be more fruitful than trying to sell that merchandise at full price now.

    The reality is that not everything will do well online. You can try to shift to a 100% e-commerce model, but by the time you do so, everyone else will have also done so and no customer will gravitate to you. Gambling on a long-term recovery may seem risky, but the alternative, the creation of some virtual platform, is worse. Businesses must make a choice: Whether to follow the intuitive online idea, fade into mediocrity, and continue suffering from historically unsustainable retail trends, or try something new and reap the rewards later.

  8. In response to the current pandemic, the government has already enacted several solutions. The IRS’s economic impact payment offers consumers support for inflation or unemployment. The Federal Reserve has pumped humongous amounts of money into the market, cut rates to zero, bought back bonds, and provided short-term funding to big financial firms. But, hardly any of these solutions help the retail sector.

    During these times, the retail industry has certainly suffered. Social distancing practices and safety measures have decreased the amount of consumers a store receives, and now, companies are stuck with massive inventories and pressure to pay annual costs.

    Many have suggested the idea of online retail as a solution for all problems, citing several major retailers such as Nordstrom, Macy’s, and J.C. Penney as examples; now with quarantine, e-commerce seems like the only future as the majority of retail stores have closed making in person shopping impossible. However, it is important to note that humans are social creatures. We enjoy interacting with other people, as evident by the 80% of retail shopping that is done in physical stores. Therefore, as retailers slowly shift to e-commerce, they should keep in mind the social experience of shopping. The retail industry is known for its customer service, a concept that can be incorporated into the virtual world as well through an online shopping helper tool. This tool will be fitted to consumer preference, with the choice to be completely disabled, enabled with chat, or enabled with video. When enabled, consumers will be connected to an employee that will help them through their online shopping experience – offering recommendations, pointing out popular products, navigating through the website, etc. Not only will the tool help alleviate loneliness that consumers may feel while shopping, but also aid those who are less accustomed to e-commerce (elderly, consumers who have previously only shopped in-person). Additionally, shoppers should have the ability to share their shopping experience with friends or family they may not be quarantining with. Websites can have a feature where shoppers can share their screens and talk to each other, and thus share the same shopping experience.

    Technology is not the only solution. In fact, other modifications may work for the situation. A major issue that people find with online retail is the inaccuracy about size of clothing. To this, online retailers should make a size guide with the approximate measurements along with a video of how to take these measurements. Another issue that retailers find is the lost rent due to the coronavirus situation. Although this is a problem that cannot be solved immediately, companies can offer sales or small gifts to incentivize consumers to do in-person shopping. Quarantine has also caused massive inventory overload, which can be approached either from a philanthropic or a business standpoint. In the business sense, orders made online can include a varying amount of gifts given the amount spent. The gifts will increase the chances that the consumer will purchase from the firm again due to the satisfaction from receiving a free good, and thus potential future profit will increase. In terms of philanthropy, businesses can donate the goods to charities or people in need. By doing so, firms will better their public image, potentially increasing the amount of future consumers. The method of incentivizing consumers can also work with the seasonal issues. As many people wait for sales during seasonal times to make their purchases, businesses should hold more frequent sales throughout the year. Although this system may seem to lose profit, firms can push-up their prices a little before announcing a sale to make up for lost profits. The illusion of saving money can incentivize consumers to purchase more throughout the year, rather than only during the holidays.

    Although companies are not well-equipped with technology now, there are websites such as Wix and Weebly that can help with the process. I believe that in the future, both in-person and online retail options will be able to provide consumers with an excellent shopping experience.

  9. While 80 percent of shopping is still done in physical stores, 20 percent of the market is a staggering amount for online shopping’s short lifespan. Many major retailers must join the burgeoning online market in addition to having their physical stores if they are to tap into a potentially whole new audience. I believe that retail and physical stores are going to be less prevalent, especially after the current COVID-19 situation. The two avenues each cater to different interests: retail stores not only market the products they sell but also the shopping experience itself of browsing the shelves or walking around a mall, while online stores market themselves on utilitarianism, stripping away the physical limitations of a store and its inventory and offering a wider selection of products in one convenient place. Amazon (pre-coronavirus) provided Amazon Prime Now, offering essentials to Prime users delivered to their doorstep within two hours, a feat of convenience never seen before.

    There are downsides to both mediums. Retail and physical stores are heavily limited by space and location. Online stores simply cannot provide the same feedback as handling products in a physical store. I always go to a physical store to try on shoes to see what size will fit me. With different brands and even different models of shoes all fitting differently, I don’t want to go through the hassle of the return process with online shopping if my shoes don’t fit. However, a common theme I see at cashiers at retail stores whether they are for clothing or shoes is the phrase, “I’m sorry we don’t have that in stock, would you like us to place an order for you and have it shipped to your door?” Even physical stores default to their online systems because of their limitations.

    What I see for the future is a blend of the two platforms in one happy marriage: virtual shopping. Virtual shopping, using software similar to that of a videogame, would provide the feedback of being in a physical store with the convenience of an online experience. Virtual stores would have endless shelves and products would be on display without physical limitation. Navigation would not result in getting lost in a huge store with sore legs but instead have convenient teleportation and guidance. Online servers would even allow for the experience to be shared with a group, shopping with friends from the convenience of your own home whenever you want. Additionally, if virtual reality were to become convenient and widely available, it could be the next step and add a second layer to virtual shopping, providing a close-to-real handling experience.

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