Executive Briefings

Retail Store 'Bubble' Has Burst and CEOs Search for Answers

Once considered a competitive advantage, store footprints have now become a burden for many chains as more shopping moves online. This week, executives from several large retailers and online sellers, including Amazon.com Inc., were under the same roof at Shoptalk to discuss the future of retail - and where physical locations fit into the picture.

Declining foot traffic and falling profit margins have forced many chains to scale back. Limited Stores Co., RadioShack owner General Wireless Operations Inc. and Gander Mountain Co. have filed for bankruptcy protection this year. Department stores including Macy's Inc., Sears Holdings Corp. and J.C. Penney Co. are closing hundreds of locations. Some retailers intend to use the savings to increase their efforts to capture more e-commerce spending.

As retail companies push the idea that their stores can be optimized to serve online customer, the word "omnichannel" has become a buzzword among executives. John Blackledge, an analyst at Cowen & Co. who attended Shoptalk last year, said executives at the conference were touting several such strategies, such as letting customers buy goods online and pick up the items in store.

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Declining foot traffic and falling profit margins have forced many chains to scale back. Limited Stores Co., RadioShack owner General Wireless Operations Inc. and Gander Mountain Co. have filed for bankruptcy protection this year. Department stores including Macy's Inc., Sears Holdings Corp. and J.C. Penney Co. are closing hundreds of locations. Some retailers intend to use the savings to increase their efforts to capture more e-commerce spending.

As retail companies push the idea that their stores can be optimized to serve online customer, the word "omnichannel" has become a buzzword among executives. John Blackledge, an analyst at Cowen & Co. who attended Shoptalk last year, said executives at the conference were touting several such strategies, such as letting customers buy goods online and pick up the items in store.

Read Full Article