A transformation in store
Brick-and-mortar retail stores need to up their game. Technology could give them significant boost.
Now should be a great time in US retail. Consumer confidence has finally returned to pre-recession levels. Americans have seen their per capita, constant-dollar disposable income rise more than 20 percent between the beginning of 2014 and early 2019.
Yet despite the buoyant economic environment, many brick-and-mortar stores are struggling. In part, that’s due to the rise of e-commerce, which since 2016 has accounted for more than 40 percent of US retail sales growth. In our most recent consumer survey, 82 percent of US shoppers reported spending money online in the previous three months, and the same percentage used their smartphones to make purchasing decisions. Not surprisingly, younger shoppers favor e-shopping even more: 42 percent of millennials say they prefer the online retail experience and avoid stores altogether when they can.
Meanwhile, the strong economy and record-low unemployment are increasing wage pressure and store operating costs. In the last three years, more than 45 US retail chains have gone bankrupt.
Retail stores have a real future
Yet rumors of the physical store’s death are exaggerated. Even by 2023, e-commerce is forecast to account for only 21 percent of total retail sales and just 5 percent of grocery sales. And with Amazon and other major internet players developing their own brick-and-mortar networks, it is becoming increasingly clear that the future of retail belongs to companies that can offer a true omnichannel experience. McKinsey – Read more…