The 2019 State of the Retail Union Address

Well the numbers for March have been released and the number of the day is 0.2%.  Yup, a dip of 0.2% in February from a gain of 0.7% in January. 

Wow.  Be still my heart.

The headline for the news release is “Improved Retail Sales Can’t Lift Malls.”  And the 0.2% is the number driving the Wall Street News story. 

Fascinating how statistical variance – however small it might be – drives perception among the masses, the non-statistical public at-large in which the press dwells among.

I have shared in Blog writings before just how much of the consumer and even business community is off in perceptions of the Internet, web-retail world. 

The question: How much did the Internet account for retail sales closures in the past quarter of the year?

The average answers i get among folks on-the-street to folks in top management and board rooms run in the 50%-80% range. 

The most recent numbers released from the U.S. Department of Labor Statistics and U.S. Census Bureau on March 13, 2019 at 10:00am EDT is 9.7%. 

And it is up... 2.0% from the previous quarter in volume which translates out to about 0.02 percentage points.  

Wow!

Journey with me for a moment into the generational groups and their respective numbers.

In 2019, the leading edge of Millennials turns 40 years old.  The trailing edge of Millennials turns 25 years old. 

The size of each age group from age 5-25 is smaller size than the Millennial Generation as it moved through the same age groups. 

In 2019, the leading edge of the Alpha Generation turns 4 years old.  And the Alpha Generation grows more and more and more in size – which in 2019 is expected to hit 20 million – each year for the next dozen or so years. 

The Boomers are now turning 73 years old this year with the trailing edge hitting the double-digit thrill of age 55. 

As Boomers evolve into empty-nesters, they begin the process of shedding everything from clothes in the closets to furniture no longer needed to even china and dishes that do nothing more than gather dust. 

So there are some major forces of change taking place right in front of us.  Changes way more statistically significant than a monthly change of 0.2%.  

According to the Wall Street Journal story, retail malls “are finding themselves in a very cloudy, confusing state.” 

The story talks about retailers closing stores in the malls.  

So far this year, they cite more than 5,000 stores closing down.  And they cite brands like Payless Shoes and Gymboree and Charlotte Russe. 

Not too sure that those brands are currently re-positioning strategically for 2020.  

And I would be willing to put a $100 bet on the table that regardless if their locations are in a mall, strip center or stand alone, the stores overall are performing below par.

BUT… according to the WSJ, those store closings represents yet another indicator that retail malls are doomed and digital will soon replace the retail world we have long known.

Thus far in the 2019 calendar year, about 40% of our time at EXPERIENCE has been focused around the retail marketplace with a number of retail brands involved in clothing to house & home. 

And here is what we have universally found to be happening right now. 

(1)  The retail marketplace is at a critical junction point of change and opportunity… and it is NOT the transition of physical shopping to digital shopping. 

(2)  Retailers closing down stores and/or filing Chapter 11 are driven more because either they target market groups that no longer exist or they are anchored by locations in neighborhoods that transitioned and changed.

(3)  Price discounting has chiseled down brand equity to the point where today many brands are throwing as much crap against the wall to see what sticks. 

(4)  Digital shopping is NOT replacing instore, onsite shopping, but instead is adding another storefront to the retail brand experience. 

The critical junction point of change is actually so simple and such a BGO – Blinding Glimpse of the Obvious – that many run from the bright glare in dis-belief. 

Here it is.

The Millennials are in lifestage transition and a transitional change that is in many ways a retail tsunami of opportunity, growth and expansion. 

The Millennials are now building their nests, purchasing homes and birthing kids.  It’s that simple. 

And unless business leadership has become so addicted to Excel in doing their math, future opportunity is busting down the door.

So is O.2% a number worth a WSJ headline story? 

No. But then again, journalism in America is going through a generational life change right now too.

If you are a retailer reading this, call us and we will tell you more.

If you are a politician, a financial firm, a healthcare firm, an entertainment brand, a CPG brand… call us too. 

And always remember, the Millennials fostered the whole trendscape of “helicopter parents” and while the parents have since transitioned to empty-nesters, the need-gap remains. 

When you call us, we will tell you more about how you and your brand can fill that “helicopter niche.”

My Email is mkooyman@experiencediscovery.com  and my phone number is 404-245-9378.  As a Baby Boomer, I prefer to actually speak in person than just in text.