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Some Big Retailers Are Still Betting On Brick and Mortar
NOV. 14, 2017 | The New York Times | By MICHAEL CORKERY.

Target’s new store near Herald Square in New York City, down the block from Macy’s flagship store and other national retail chains. It is one of about 130 smaller format stores Target has opened or plans to open by the end of 2019. The new stores are scaled back versions of the big-box Targets that predominate in the suburbs.

The company’s store strategy stands out at a time when just about everyone seems to be questioning the relevance of brick-and-mortar retail. Amazon is seizing an ever-larger share of consumers’ wallets, reducing foot traffic to stores.....The retail industry has been pushing back against the pessimism. This summer, the IHL Group, a retail and hospitality advising firm, produced a report that showed retailers will open more new stores than they will close this year. (Most of the growth, however, came from restaurant openings, not new department stores or big box retailers.)....

“The negative narrative that has been out there about the death of retail is patently false,” Greg Buzek, the group’s president, said in August when the report was published.

Some of the biggest growth in brick-and-mortar stores is coming from discount retailers, like TJX, the parent company of T.J. Maxx and Marshalls. E-commerce may offer convenience and instant gratification. But shoppers are still willing to go into a store to hunt for a good bargain.“......The big challenge is how do you get customers to come into a store if they don’t have to,” said Melina Cordero, head of retail research for Americas at CBRE, the real estate firm.....Walmart is also trying to generate more buzz around its stores, which had drawn complaints from some customers in recent years for being too cavernous and unpleasant to shop in.

This month, Walmart is holding holiday parties — complete with toy demonstrations and workers in reindeer hats — as it “cranks up the volume on store experiences.”...Retailers like Walmart are hoping they can build a more profitable business that incorporates both brick-and-mortar and online shopping — a strategy known in the industry as “omni-channel.”

Online retailers like Amazon face high transportation costs, particularly as they guarantee free two-day and even same-day delivery. They are also bearing the cost of processing free returns.

Many analysts and retail executives said Amazon’s purchase of Whole Foods and its more than 460 stores validated the relevance of brick and mortar. Still, e-commerce continues to grow at a blistering rate, far outpacing the increase in overall retail sales. Unless that growth abates, analysts and economists question how so many stores — from suburban malls to hip boutiques — can survive.
retailers  Target  bricks-and-mortar  small_spaces  store_closings  big-box  CBRE  Wal-Mart  omnichannel  e-commerce 
november 2017 by jerryking
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