Many retailers Shutting the Wrong Storessays Mckinsey
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 Considering all of these practices, the usual methods to measure a store’s success are outdated, according to Mckinsey.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