The holiday shopping season is upon us once more, and, once again, thanks to a still-booming U.S. economy, there’s money to be made. The National Retail Federation (NRF) recently reported that it expects holiday retail sales during November and December to increase between 3.8 percent and 4.2 percent over 2018’s total receipts of $701.2 billion, to a 2019 total of between $727.9 billion and $730.7 billion.
But the story of retail has always been about more than just numbers – it has been one of constant change and renewal. In the beginning, America’s mom-and-pop stores were local and family-owned and operated. And before the transportation revolution of post-World War II, people shopped where they could walk. Then, malls moved commercial energy from Main Street into the suburbs, and big-box stores took a greater share of the market. Fast forward to the new century, and the computer age ushered in the novelty of online selling, with Amazon the reigning retail Colossus.
Because of that evolution, over the last few years, many mom-and-pop stores were forced to shut down, unable to compete with those larger entities, which can, generally, sell items for less because they have lower costs and higher volumes, and, in the case of the online retailers, a greater offering of convenience. That being said, rumors of the imminent demise of the mom-and-pop, brick-and-mortar store have been greatly overstated. In fact, as regular readers of Business View Magazine’s Cities section might have noticed, there has been, recently, a definite shift back toward town center-style shopping districts and urban mixed-use projects, and as towns and cities, themselves, evolve they are opening up more and more opportunities for the individual retail entrepreneur.
And perhaps, more importantly, there has been a marked change in the shopper demographic. First, it’s been well-accepted that Millennials – those born between 1980 and 2000 – actually like to shop local. Studies suggest that some 40 percent of Millennials claim a preference for buying close to home, even if the goods or services are more expensive than mass market alternatives. Why? They like feeling connected to their immediate communities, as well as to the products they buy, and no purchase connects better than one from the merchant just up the street. Millennials also crave customized products, preferring unique (versus mass-appeal) offerings that let them express themselves.
And just as Millennials overtook Gen X, now Gen Z, the first truly digital generation to grow up in a world of smartphones and ipads, has access to $44 billion worth of buying power. And, according to a 2017 NRF study, 67 percent of them say they shop in a brick-and-mortar store “most of the time,” with another 31 percent shopping in-store “sometimes,” indicating that a whopping 98 percent of them are ready to patronize any retail outlet that caters to their needs and desires – small, local enterprises, included.
So mom-and-pops have the ability to make the most of their legacy strengths, which include: providing locally-produced and/or unique artisanal products that are often perceived as higher in quality; responding faster and more effectively to market demand than the big-box stores can, while offering one-of-a-kind, in-store experiences; nurturing customer loyalty by providing more individualized service (75 percent of shoppers are more inclined to buy from a business that recognizes them); and demonstrating their sense of social responsibility by supporting worthy causes within their communities.
Then, mom-and-pops can add to those competitive advantages, the best of the digital age’s roster of conveniences, including a robust online presence and an omnichannel sales model, in order to leverage the power of the internet’s social media and targeted marketing capabilities. This year, over two thirds of holiday shoppers will use their mobile devices to research a purchase during the holiday season, but where they eventually spend their money is not a given. It’s anyone’s to earn.
So, these are interesting times for the retail industry. Some mom-and-pops will acclimate quickly, and others will take more time to figure things out. But, as usual, the ongoing story of retail will be about overcoming challenges, adapting, and evolving. Retail isn’t dying; it’s moving onto its next iteration.