Many re­tail­ers Shut­ting the Wrong Stores­says Mckin­sey

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More than 7000 stores closed in the US in 2017, and the trend con­tin­ues into 2018. As traf­fic in US shop­ping malls de­creases, in­vest­ment bank Credit Su­isse fore­casts 25% of all Amer­i­can malls to close by 2022. How­ever, some com­pa­nies may be choos­ing the wrong shops to close, ac­cord­ing to a re­cent study by man­age­ment con­sul­tancy firm Mckin­sey & Com­pany. “Many re­tail­ers are pri­mar­ily tak­ing into ac­count the sales and prof­its that the store gen­er­ates within its four walls, with­out con­sid­er­ing its im­pact on other chan­nels.

The con­sumers of to­day shop across dif­fer­ent chan­nels. “Show­roomers” visit brick and mor­tar stores to look for ideas and in­spi­ra­tion, only to buy the prod­ucts on­line later on. “We­b­roomers” do the op­po­site, as they pre­fer to see and touch the prod­uct be­fore com­mit­ting to a pur­chase. There are also many con­sumers who pre­fer to pick up or re­turn their on­line pur­chases at a phys­i­cal store. Con­sid­er­ing all of these prac­tices, the usual meth­ods to mea­sure a store’s suc­cess are out­dated, ac­cord­ing to Mckin­sey. “The most so­phis­ti­cated re­tail­ers are now closely ex­am­in­ing the in­ter­play be­tween off­line and on­line cus­tomer de­ci­sion jour­neys”, the firm says. A store that doesn’t sell much may still be ben­e­fi­cial for the com­pany in terms of brand aware­ness, or by driv­ing sales in other chan­nels

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