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The news about the economy has been so encouraging lately that it would be easy for us to forget that one major industry is in a state of flux. Retailing has been transitioning into e-tailing for several years now. It seems every week we read of more major retailers shutting their doors and moving online. Just last week, Macy’s announced it is closing 125 over the next three years and cutting 2000 jobs. Fortunately, the Louisiana stores are safe for now, but what does this say for the future of brick-and-mortar stores? This news follows in the footsteps of Sears, Toys R Us and JC Penney, among many other name retailers.

A slower than expected fourth quarter 2019  does not necessarily indicate that Americans are not still in the shopping mode. Some economists attribute slightly lackluster sales to volatility caused by the trade war with China. But what is becoming clearer by the quarter is America’s penchant for shopping from the comfort of their own homes.  When you can buy that new pair of shoes, holiday gifts or even a new sofa with a few keystrokes on your phone, are you really going to drive across town to a mall? Maybe not.

To their credit, major retailers jumped on the e-commerce bandwagon early on. What they may not have foreseen was the massive shift to online shopping to the detriment of their physical stores. Some of the early criticism of e-commerce centered on its lack of personalization, and the absence of face-to-face contact with sales personnel. As it turns out, our digital shopping experiences have in some ways become more personal. Technology now allows online stores to study your shopping preferences and history, and then target their promotions to your own shopping habits. Additionally, many online retailers offer real-time, person-to-person customer assistance. Because of the databases the online service personnel can access, they can actually give you more in-depth information about merchandise than you could ever hope to get in a physical store.

It would be too easy to assume that retailers are going to give up on physical stores. Just as they built their industry in the 20th century, some of them have plans for the future. Macy’s, for example, reports that 40 percent of its customers shop at its online store. Some industry insiders say that figure is way too low. But Macy’s, while closing stores in underperforming malls and urban areas, says it plans to expand in more upscale areas, with standalone stores under its banner of Backstage, its off-price merchandiser. In other words, one of the pioneers in the department store genre is strategizing to strike a good balance of brick-and-mortar sales and online business.

While we watch failed malls being repurposed into condo buildings, office complexes and other mixed-use concepts, chances are the brick-and-mortar store may hold its own, even in a digital society. If there is one bad omen in this outlook, it may be millennials. This group, between the ages of age 23 – 39, makes more than 50 percent of its purchases online, according to one recent study. This year alone millennials will spend up to a trillion dollars in purchases. While they are clearly trending away from physical stores, the generation just behind them is directing even more of its shopping behavior online.

That does not bode well for the future of brick-and-mortar stores, but as the major players try new strategies, the physical store may yet make a comeback.

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