Tag Archives: Department stores

E-Commerce is Wiping Out Mall Retailers One by One. Here’s the Data, by Wolf Richter

The shift from department stores to online is one of those epochal business developments, like mass production or credit cards. From Wolf Richter at wolfstreet.com:

Department store sales hit a new record low in the data going back to 1992.

E-commerce sales in the fourth quarter soared 12.1% from a year ago to a new record of $132.8 billion (seasonally adjusted), the Commerce Department reported this morning. For the whole year 2018, e-commerce sales blew through the $500-billion level for the first time, reaching $513.6 billion, up 14.2% or $64 billion from a year ago.

Not seasonally adjusted, e-commerce in Q4 jumped to $158.5 billion, 11.2% of total retail sales. E-commerce sales have doubled over the past five years.

E-commerce includes sales by the online operations of brick-and-mortar retailers, such as Macy’s, Walmart, and Best Buy, along with the sales of online-focused retailers, from small operations all the way up to Amazon.

People still say that e-commerce accounts for only 11.2% of total retail sales and therefore doesn’t matter. But this metric is misleading because e-commerce doesn’t yet seriously compete with a number of retailers, including gasoline stations, new and used auto dealers, and grocery and beverage stores. These three categories alone account for 52% of all brick-and-mortar sales.

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Black-Friday Woes: The Death of the Department Store, by Wolf Richter

The Internet is proving a tad “disruptive” to traditional retailing, especially department stores. From Wolf Richter at wolfstreet.com:

They no longer shop till they drop.

Black Friday is when you’re supposed to shop till you drop. It kicks off the holiday selling season. No season is more sacred for retailers. They’re expected to do about 40% of their annual sales in those few weeks till Christmas.

The National Retail Federation is bubbling over with enthusiasm, expecting holiday sales to grow 3.6% this year to $656 billion. Since Trump has won the election, consumer optimism about the economy has surged, and this is expected to be one hot holiday selling season.

But not today, not at brick-and-mortar retailers, according to Reuters:

“Initial reports show it’s steady and not very busy at stores around the country,” explained Craig Johnson, president at Customer Growth Partners. The retail consultancy deployed 18 people to observe customer traffic across the country.

Store traffic remained subdued across the country, according to spot checks made by Reuters reporters and industry officials.

Rain hurt shopping at stores in the Northeast, Johnson said, but some retailers like Best Buy and Wal-Mart saw improved customer traffic at stores across the country.

Macy’s and Best Buy on Chicago’s Magnificent Mile were packed, but employees said most of the customers were tourists.

Chicago’s State Street, a normally bustling shopping area popular with locals, was desolate.

The Los Angeles Times reported a similarly gloomy scenario from Southern California:

Shoppers out in the early hours on Black Friday roamed stores in Southern California that they say were emptier than in years past.

At 4 a.m. at a Target in Duarte, Michael Chung, 40, and his three children said many of the store’s doorbuster items were still in stock. Last year, he recalled, many already had sold out by that predawn hour.

“There’s less people, and you don’t feel the holiday spirit,” said the seven-year veteran of Black Friday sales. “It’s scary. It doesn’t feel like Black Friday. This year is very weird.”

To continue reading: Black-Friday Woes: The Death of the Department Store