More News For Retail That Validates Three Predictions

There’s been a string of bad news in the retail sector: 

1. Pier 1 Imports — which one late night comedian (accurately) described as “that store where you bought that pillow one time” — has filed for bankruptcy. The bricks-and-mortar retailer plans to close nearly half of its 940 stores, according to the Wall St. Journal.
2. Wayfair recently announced the layoff of 500 employees, per the Wall St. Journal, while Walmart laid off 200 employees from an online furniture retailer it owns. 
3. Victoria’s Secret has been sold to a private equity group, with the Wall St. Journal noting that: “Les Wexner’s decision to part ways with Victoria’s Secret is an admission that the 82-year-old billionaire couldn’t revive the fortunes of a troubled lingerie brand he had built around shopping malls and sex appeal.” 

So we’re seeing ongoing weakness from both primarily mall-based as well as online retailers. 

That’s a real problem, and a trend that we’ve been predicting for some time. We’re not happy to be right, especially because we don’t have any recommendations or solutions.

But AdWeek has some suggestions for brands — which is not the same thing but shows that even brands that do well selling online are fearful. Check out “How Brands Are Battling Knockoffs on Amazon: With a proliferation of third-party sellers, fighting copycats can feel like a never-ending game” and “How to Protect Your Amazon Listings From Copycats.”

Meanwhile, validating another trend that retailers will use technology to improve the customer experience, in an article entitled, “Grocers Wrest Back Control of Shelf Space,” the Wall St. Journal reports that, “Retailers are relying on their own proprietary research to decide where to shelve products, dealing another blow to large U.S. food companies that are already dealing with increased competition and shifting consumer tastes.”

Finally, we’ve predicted that there’s a renewed push for profitability and financial discipline among apps, particularly pointing to food delivery services as a sector that would need to raise fees and change their business models to stay in business. That prediction has been validated by yet another Wall St. Journal article: “Food-Delivery Firms Put Mergers, IPOs on the Menu: DoorDash, Grubhub and others are weighing tie-ups or looking for funding.”

American consumers still seem fine spending their money, but spending patterns are evolving. And other than Amazon and Walmart, retailers don’t really knows how to survive. So we expect ongoing turmoil, unfortunately. We're not economists but it seems hard to believe this is not going to impact employment rates and the economy at large.