Retail Stores Heavily Impacted by eCommerce
Posted by AMS / Monday, May 8, 2017
For some time now, we have seen brick-and-mortar retailers struggling to survive. It’s the age of eCommerce, online shopping, finding deals on trusted brands and new products without ever entering the department store to see what you’re buying. Yes, foot traffic at America’s malls is in decline.
We’ve recently seen Payless ShoeStore file Chapter 11 bankruptcy and announce the closure of nearly 400 stores. This follows several large retail giants including Sears, Macy’s and Kmart, announcing that a number of their stores will be closing. Others are experiencing the change as well, with smaller specialty stores shutting down altogether.
There was a time period where the mall was the place to be, not just for shopping but for socialization, fun and excitement. Now, with the advent of mobile phones and social media, people are socializing and shopping in a new way and the retailers are implementing new strategies, adjusting to the change.
This trend to purchase and sell goods and services via the Internet began around 50 years ago. Going back, we find the first examples of eCommerce via an electronic data interchange (EDI) on value-added networks (VANs). After that the public began to turn to the Internet for certain products. By the early 2000s, EBay was doing beautifully and Amazon had grown quite large through book sales.
Websites were offering products, but still, a person might be reluctant to buy an item of clothing or shoes without being able to check sizes, fabrics, quality and so on. Gradually public trust grew alongside confidence that purchases could be returned and the customer service was adequate. AMS Fulfillment has watched this change take place and we have been changing with it.
A recent ZeroHedge article looks at how the 18-35 generation, aka Millennials, have driven the change in shopping:
Millennials favor the convenience of online shopping,
Millennials do not find value in big suburban malls
Millennials often work a lot of hours and don’t want to waste time commuting/driving to suburban shopping.
Hard to beat the easy return policies or the value of free delivery,
The future of the Mall is likely limited as well as many “brick & mortar” retailers.
America is the most highly over-stored nation in the world. Excess retailing space is a massive future problem.
Amazon has reached critical mass and as Millennials continue to dominate, online procurement and delivery will continue to accelerate.
Still, millions of people enjoy the mall, and the iconic department stores, and would like to see them create a prosperous future. In an effort to do just this, department stores have been expanding what they offer customers. One means has been to provide a more customized experience for the shopper and offer personal attention and VIP services. Among those offerings are in-store stylists and tailors, loyalty programs, special events such as wine & cheese offerings, subscription services, sales preview events, customized fragrances, and so on.
As one might expect, AMS Fulfillment has expanded and adapted to eCommerce growth. Being the 3rd party between the seller and the buyer, we serve both our clients and their customers. As a full-service company, AMS, does more than fulfillment. For a number of our eCommerce clients we handle the warehousing and order fulfillment plus the entire back office: customer service, returns, repairs, and accounting.
Please visit our website for more information on the AMS Full Service Model.