When big name brands that we grew up with as children start dropping like flies, for no apparent reason, it is high time to take notice and take notes. Mega retailers such as JC Penney, Sears, RadioShack, and even Macy's are shutting the doors all over the US.
Those who aren't really paying attention might say that it is a recession that is causing this upset. Yet, the thing is, unemployment is below 5 percent, gas prices are lower than they have been for some time, the national GDP is actually up, and the lower to the middle class have seen some wage increases within the last year or two. On top of all that, people are actually buying more - just not in stores.
The Way Americans Shop Has Changed
Amazon and eBay are truly disrupters, without a question. That word gets thrown around alot these days, but in this sense, it’s used correctly. Amazon grew in size by eight times between 2010 and 2016, which is nearly godlike in the business world. Amazon went from $16 billion in North American sales to $80 billion in only six years. Now, look at Sears with only $22 billion in 2016, and you can see they never had a chance.
Several reports have shown that over half of America is now an Amazon Prime subscriber. And that is only in North America, mind you. Amazon sells online globally.
The Great Retail Apocalypse of 2017
If zombies make up the plots of apocalypse movies - the walking dead - then huge multi-level malls and strip malls are the centre of The Great Retail Apocalypse of 2017. The name is a bit more scary than what it actually is. Basically, America built way too many giant retail stores. When the internet provided a place for digital markets, consumers gradually began to buy stuff from online vendors.
Within the last four to five years, mobile applications slowly took over, and consumers found it even easier to order anything and everything they want via their smartphone. At present, you can order everything from underwear to pizza, all at the push of a button, from anywhere.
So, how and why did this destroy the larger brick and mortar retailers? The most simple answer to this is that they not ready. Simple as that. Furthermore, as technology proliferated throughout industries, many larger retail chains ignored the warning signs.
Large brick and mortar retail chains kept employing the discount scheme in order to swoon consumers, but it wasn’t discounts and coupons consumers wanted. Consumers began to care more about customer service and convenience - something provided by the online market place.
While Retailers Die an Agonizing Death, Restaurants Are Thriving
As the large retail stores suffer their last pangs of death, restaurants have somehow been able to harness not only the power of the internet and mobile applications, but they have also kept the customer experience enjoyable for consumers. With technologies such as the restaurants pos system and mobile ordering applications, restaurants have been clocking in the dough, big time.
As a matter of fact, an article by cnbc.com points out that it isn’t just revenues on the rise thanks to great mobile applications, but customers are actually tipping more through them as well. Mila Salvatierra, general manager at La Patagonia, told CNBC, “We are offering better service because now they (customers) don't need to wait so long to pay…they can pay straightaway…so we have improved our service.”
Mobile application start-ups have also reported that those restaurants that use their apps reported a rise in tipping. For example, the Cake app, a London-based startup, allows customers to view their bill in real-time, along with splitting the bill for them if they so choose. The application's co-founder Michelle Songy acknowledged that diners often pay more than the minimum total of the bill.
In an interview with cnbc.com, Songy said, "We do see increase at bars where people haven't been tipping. I'd like to think as we are trying to make the payment experience a bit more fun, easier or quick it leaves you with a better experience.”
We can all take a lesson from this entire story: there is a great importance in remaining tech-savvy, especially in the world of business. Far too many examples abound exemplifying how brand giants that were once leaders in the global market failed to adopt new technologies and paid a hefty price. Yet, there are also plenty of positive examples of companies, big, medium and big who kept pace and are still as strong, if not stronger than ever.
About Philip Piletic
My primary focus is a fusion of technology, small business, and marketing. I’m an editor, writer, marketing consultant and guest author at several authority websites. In love with startups, latest tech trends and helping others get their ideas off the ground.