Mark Mathews, vice president of research development and industry analysis for the National Retail Federation, answered questions from Hardware Retailing about what recent store closings and openings mean for the retail industry.
Hardware Retailing (HR): Is the number of retail stores decreasing or increasing in the U.S.?
Mark Mathews (MM): Big picture, we certainly see the number of stores growing. When well-known retailers close stores, there’s almost a psychological factor. People love retailers and when one goes out of business, there’s a building impression that we’re in a retail apocalypse. But the data says something completely different. More stores are opening than closing. In fact, for every retailer closing stores, five retailers are opening stores. Every segment of retail, including department stores, has more companies opening stores than closing.
HR: Which retailers are finding success?
MM: I think you’re seeing a broad spectrum of different types of success stories. Retail has evolved multiple times throughout its history, driven by shifting consumer preferences, new technology and demographic trends. To be successful, according to Wall Street, you have to grow your same-store sales. However, the growth of e-commerce is forcing retailers to find an appropriate balance between physical and digital channels and to rationalize their store footprint. Stores are not just places to transact. They are places to engage with your customers and deliver a positive customer experience.
HR: Do you foresee consumers continuing to value brick-and-mortar store experiences?
MM: Just as banks didn’t close because of ATMs, stores aren’t closing because of online sales. Buy online, pickup in store (BOPIS) and in-store pickup are good for brick-and-mortar stores. Using old metrics to measure the value of the store is going out the window. Retailers need to view online transactions and in-store shopping as one experience. It’s all one blended thing. Customers are becoming multichannel shoppers. I think these old notions of what a store should be don’t apply now. Gen Z likes to be in stores as much as anyone else. It’s this blended experience, and small stores are starting to have the resources to do what the big stores are doing with technology.
Mark Mathews is vice president of research development and industry analysis at the National Retail Federation. He is responsible for helping develop, evaluate and direct the research initiatives for the trade association. He has spent more than 20 years working in research in a variety of roles in the U.S and the U.K. Most recently, he headed the Market Intelligence Group at the World Gold Council.