By definition, according to Phillip Kotler the Father of Modern Marketing, retailing includes all activities involved in selling goods or services directly to the final consumer for their personal, non-business use. For twenty-six years students enrolled in my retail classes had to memorize that definition.
Today retailing has expanded to include online or e-commerce retailing, home deliver and store pickup.
We all know someone who has worked or works in traditional retailing, a brick and mortar store or shopping center. For years retailers have faced the challenges of catalog retailers, online and e-commerce retailing and many have found a way to blend the different ways of operating to remain successful. The “Wheel of Retailing” has given us the Walmarts, big box stores, and super centers which forced many main street retailers and independents out of business but retail as an industry has survived.
Today’s challenges have forced even the biggest retailers into rethinking how they operate. The “coronavirus,” and “stay at home orders” have changed everything. Stores deemed nonessential are closed and the dates for reopening are every changing. Some at the direction of the federal government, many with state orders and some with local mandates. Retailing is no longer available when and where we want it.
According to the National Retail Federation this is an industry that directly employs over 42 million Americans. Approximately 29 million are part time jobs. Those employees being the most vulnerable in time like these.
Everyday you read of another retailer closing stores and furloughing employees. This week American retailer furloughed nearly 1 million workers. GlobalData Retail estimates that total store closures will reach 200,000 by the end of the month. Even though furloughs are meant to be temporary, it’s unclear whether workers will have jobs to return to once the crisis calms.
Many are fortunate to work for the Apples of the world where they are still being paid and receiving benefits, but what about those that work for Mom and Pop retailers or the Hobby Lobby’s of the country? In a statement posted on Friday afternoon (04/03/30), Hobby Lobby announced it would furlough "nearly all store employees" and is "ending emergency leave pay and suspending use of company provided paid time off, benefits and vacation.” A sad statement for where we are in this country.
What will happen to the employees that lost their jobs? What will the retail industry look like when this is over? Who will survive?
Fortunately unemployment benefits will bridge the gap for some and the extended time may get these worker to the other side of the pandemic.
But what can be done to help retail businesses?
Stephen Smith, President of LL Bean, suggests “cutting or dropping tariffs on products made in China.” The savings will allow retailers to charge less for products creating more demand and more business. This can have an impact all along retail from clothing to electronics to daily necessities.
Some believe pent up demand will bring customers back. Not being able to buy those things consumers have grown accustomed to may help.
And don’t forget shopping can be a social event. After being home for weeks on end a trip to the mall may be therapeutic.
The challenge for retailers is to create a new “must have” and new excitement in stores across the country. Many of us remember retail migrating to the suburbs in the 60s asking “what will happen to the downtown district in cities across the country.” We’ve witnessed shopping center being overtaken by regional centers and yet the progressive retailers and cities found a way to succeed. Yes, we’ve lost some of those old retailers but they’ve been replaced by the next generation of retail.
Americans have a desire to shop and consume the next best greatest item. Retailers are creative, inventive and understand change must occur to succeed. We will see changes we can’t imagine now but retail in America will be back and stronger when these time are over.
I'm excited!
04/05/2020
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