(Newswire.net — February 2, 2018) — The holiday season is officially here, and while shoppers are expected to spend up to $967 each on average, which represents a 3% increase from last year, more shoppers than ever say they are planning to spend their money in online stores.
According to reports from a recent survey by the National Retail Federation, up to 59% of shoppers plan to take businesses to online stores and not to big box stores like Target and Walmart. This marks the first time in history online stores are the most preferred choice for shoppers. There has been a steady shift in online shopping in previous years. In a previous study by UPS and analytics firm comScore that involved 5,330 shoppers, it was found out that consumers made up to 51% of purchases from online stores in 2016, 48% in 2015, and 47% in 2014. The findings by the National Retail Federation confirm that online shopping is accelerating and its impact on the brick and mortar stores is going to be particularly brutal.
In what seems like a direct result of consumers’ shift of preference, there have been over 6700 store closures announced this year, according to reports by a retail think tank, Fung Global Retail and Technology. This is more than triple the number announced last year. Also, 625 stores including Payless Shoes, Gymboree, RadioShack, and Toys R Us have filed for bankruptcy. Other retailers like Sears Holdings are also doubtful whether they will be able to continue operating.
Despite this turn of events, retail experts say that this year’s holiday season is very critical to many troubled brick and mortar stores. Chief analyst at Standard and Poors, Robert Schulz says that while every other holiday season is important, “this year’s holiday season is more important than ever.” Physical stores are trying their best to remain relevant with a good number starting holiday sales early. Target, Walmart, Best Buy, Kohl’s, JCPenny, among others opened on Thanksgiving evening. A retail analyst at AArete, Mike Kim also notes that online shopping has sped up a change in the retail industry, and with this compressed speed of change, this year’s holiday season is critical to many retailers.
Store closures are expected to rise next year to around 9000 as more shoppers go online. Experts say that although some troubled retail brands may still be in business next year, there is still chance that most of their stores will close. Again, they point out that in case the economy faces some challenges, troubled retail outlets could be left at worse than they are now. Leon Nicholas, an analyst at Kantar Retail, says that while there is still some breathing space for some players, any economic downturn or just a rise in interest rates may leave them exposed. However, struggling retailers are saying that they are doing necessary changes that will see them survive longer.
Consumers are now doing most of their shopping online. “That means, brands who can gain consumers’ attention and trust online will be favorably positioned in this new era”, say the marketing experts of Lodlois, a site that reviews popular products from online stores.
Even as more stores are expected to close, there are still new entrepreneurs looking to set up shop as space opens up. Tom McGee, the CEO of International Center of Shopping Centers says that the rate of occupancy is now over 90%.