Why the retail “apocalypse” is really a renaissance


The great retail bifurcation

Why the retail “apocalypse” is really a renaissance

An industry on the verge of collapse?

Conventional wisdom holds that traditional retailers have stopped growing, as shoppers, especially millennials, make more and more of their purchases online. Conventional wisdom, however, is often a poor substitute for true understanding. Indeed, when one digs into the facts about retail, one may find that the picture is much more nuanced.

Understanding the complex issue of retail bifurcation requires a microscopic approach to the data emerging from the retail sector and considering what gets lost in the conventional wisdom concerning the industry.

The study focuses in on:

  • The economy. To begin with, we looked at the US economy to see how it has performed over the past decade, a period that witnessed the collapse of the housing market, the great financial crisis, and the deepest and most severe recession to hit the nation since the Great Depression. By digging deep into the data, we found that every measure we surveyed told a positive story that isn’t necessarily indicative of a retail apocalypse.
  • The retail sector. Retail across all channels, including in stores, continues to grow. While online sales growth receives the most press, it is still fairly modest as a percentage of total retail sales. Online represents just 9% of total retail sales. The vast majority of retail sales—91%—take place in brick-and mortar stores, hardly the stuff of apocalypse.
  • The consumer. We looked at patterns of shopping behaviors along lines of income and consumer economic well-being. What we discovered is that the consumer’s personal economic well-being is uniquely reflected in a consumer’s behavior, more so than any other lens by which we viewed the data. This lens, and the degree to which it revealed dramatic differences, and of purchasing habits suddenly stood out.
Did you find this useful?