Think about a big box store in your hometown. The institution that stands larger than life, with the massive parking lot, where you can go and spend half a day shopping for pretty much anything you need and waiting in line for the other half.
Of course I’m exaggerating, but the experience associated with shopping at big box coupled with the surge in online and local shopping trends has been derailing the big box business model for years now.
Although these stores always seem busy (at least to me), the ever changing landscape of consumer buying habits, demands and most importantly behaviors have poked holes in the armor of these brands resulting in massive closures.
I can think of one glaring example in my hometown. Over the past decade, we have seen the demise of Zellers, a Canadian retailer, replaced by Target, only to see Target close a couple years later. It’s now being replaced by a Lowes.
I have no doubt that you could tell a similar story, with multiple examples of big boxes promoting grand opening followed by liquidation events a few years later.
According to a recent study from Green Street Advisors, big box retailers have seen a steady decrease in sales. Retail Touchpoints reports Kmart and Sears are closing a combined 78 stores, reducing their numbers to half of what they were they merged in 2005.
Regardless of the reason for this failure, the approach that big box has taken, is clearly broken and could mean sweeping changes in the years to come, including downsizing footprint, increasing focus on both online and in-store experience (Target recently announced the launch of beacon technology), and a shift towards digital technology.
What does it mean?
Whatever happens, I am interested to see how some of the biggest brands in the world approach this, and how their actions could shift the retail environment in the future.
So what does this mean? These closures ensure that downsizing footprint, shifting towards digital and shoring up an online presence are at the top of everyone’s mind.