You can buy pretty much everything you need online. Brick-and-mortar stores still exist everywhere in the US, but each passing day makes them less essential, and even the people running them can’t deny it.
In a recent survey (pdf), 58% of executives at US middle-market retailers predicted that brick-and-mortar-only stores are destined for obsolescence. The survey polled 250 respondents, and was conducted by Harris Poll on behalf of CIT Group, a bank that lends to small and middle-market businesses.
While surveys often affirm that shoppers still prefer to buy in stores, the spread of e-commerce means fewer people are even making it out to stores to begin with. According to RetailNext, foot traffic to physical stores in the US has seen double-digit drops twice in recent months, and combined sales fell 12.2% in October.
Those sorts of figures are part of the reason for the long, painful decline of the American department store, reflected in dismal quarterly earnings reported by Macy’s, Nordstrom, and JC Penney last week. E-commerce alone isn’t enough to save them, but just imagine what state they’d be in if they were relying entirely on their physical stores. Not surprisingly, 45% of the executives surveyed feel the death of the American mall is inevitable.
And it’s not just about the middle-market. The luxury sector has been one of the most staunchly resistant to e-commerce, and it, too, is finally giving in.
French luxury group LVMH recently poached a top Apple executive to lead its new digital efforts, and its subsidiary label, Dior, just announced that it’s going to test e-commerce in North America for the first time ever with a limited online popup hosted by Bergdorf Goodman’s website. For years, Dior, like many other luxury brands, has argued that the experience of seeing the craftsmanship of their products and building a relationship with the store associates in person is paramount to their brand.
“At a certain point the customer has voted that this is the way that she wants to shop,” Joshua Schulman, president of Bergdorf’s, told WWD (paywall) about the Dior launch.
It’s true whether that customer is buying a $75 sweater or a $1,140 pair of Dior sneakers.