How is traditional retail fairing, particularly in the face of the e-Tail explosion? Is there a future, who is struggling, and who is doing well…and what insights can be gained for both traditional retailers and ecommerce e-tailers, as we look ahead to the rest of 2018 – and beyond?

State of the Retail Nation

“Retail apocalypse” headlines have been driven by store closures across the US, headlines which seemed to reach a peak last year. Stalwart department stores like Macy’s, Sears and J.C. Penney have seen reduced operations and closed up stores, while a whole bunch of specialty retailers like The Limited, J.Crew, and Toys R Us have been publicly struggling with debts and bankruptcy.

In fact, according to Moody’s Investors Service, distressed bond issuers in the U.S. retail and apparel markets are nearing recession levels. And it gets worse, as debt maturities are on the rise and retailers are filing for bankruptcy at record rates.

In terms of the numbers, approximately 7,000 US stores closed their doors last year, with closure announcements in 2017 increasing by over 200% year on year.

These Brands Are Getting It Right

Against this backdrop, it does appear that there are some brands that are getting it right. The names might surprise you, but the results speak for themselves.

TJX, the parent company of Marshalls, HomeGoods and T.J. Maxx, have been growing square footage by 4% to 5% per year, as shoppers flock to great deals, unique brands and a “treasure hunt” to find hidden gems.

Dollar Tree is also finding favor with consumers, who shop for low prices and convenience. It has opened over 600 new locations over the last 12 months, and plans hundreds more over the next year, according to vice-president of investor relations Randy Guiler.

One of the biggest winners has been Ikea. In an attempt to make shopping more convenient, and to compete with the likes of Amazon, the company has allowed customers to buy products online, and then pick them up in store. They’re also cutting shipping prices, opening new locations, and, critically, are investing in a new center to handle online orders.

Big News To Follow

One of the major differentiators between online sellers and brick & mortar stores is about to get interesting. The Supreme Court is set to rule on whether e-retailers should pay state sales tax, in a decision that could potentially shake up the industry.

For the last 25 years, states could not force out-of-state retailers to collect sales tax unless they had a physical presence in the state. This legislation was put in place at a time when few people foresaw the prevalence of ecommerce on the scale that is seen today, and which obviously gifts a huge advantage to online retailers.

Interestingly, Amazon is one of the businesses that won’t be affected; they collect sales tax in all states (albeit only from April 2017, when this was instituted across the board).

What is for sure, however, is that reversal of this precedent would be a massive win for brick & mortar businesses who have argued against this unfair advantage. A decision to their satisfaction could seriously level the playing field.

What’s The Secret

How are some stores flying, while others tank? What’s the secret, and what’s happening in this space on a macro level?

In a great article for Fortune, digital retail expert Steve Dennis pins 3 main factors: the irrational expansion of retail space during the past 2 decades finally correcting itself; retailers optimizing their footprints to better align space with demand, as they understand the physical requirements to support a world where online is a significant and growing sales channel; and finally, retail brands failing to innovate and create a meaningfully relevant and remarkable value proposition. He sums it up in one sentence:

“Physical retail is not dead, boring retail is.”

For Dennis, death is in the middle; poor strategy, lack of excitement, or a non-existent or ineffective omnichannel strategy.

What’s true for traditional brick & mortar stores is just as applicable to online offerings, who are not immune to these dangers.

In the words of Dennis, “Similarly, many pure-play online brands with unsustainable economics will either figure out a viable bricks & clicks strategy (e.g. Warby Parker), get acquired by the digitally-native brand bailout fund known as Walmart, or go ‘buh ‘bye having burned through both their cash and all the greater fools”.

For ecommerce businesses, it is more critical than ever to stay exciting,  keep abreast of macro trends, and drive home any advantages available – including driving business expansion through up-to-the-second data, decision making, and insights. For this, ecommerce businesses need a partner like Market Beyond, who can provide tons of data and real-time, actionable insights on all categories, even down to product level.


Traditional retail isn’t dead, but it’s not in its best state ever. For thought leaders, 2017 was a “pruning of the bush”, as brick & mortar stores are learning what works, and are perfecting their omnichannel offerings to deal with the threat from ecommerce. The companies finding success in this environment – both online and off – are providing customer-centric offerings with something better than what their competitors are managing to provide. And in the face of this resurgence, for ecommerce companies to stay ahead of the game they will have to leverage every advantage they can.



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