In trying to explain the frustrating earnings reports of Macy's, Nordstrom and other traditional retailers, it's easy to go back to the brick metaphorand-
Mortar retail is dying, only e-
Business can save it from extinction.
The results of large discount stores such as Walmart and Target this week are likely to strengthen this.
After all, a cursory look at the stock charts of Amazon and other retail giants seems to be able to tell you everything you need about who won the fight for shopping dollars.
But look deeper.
Business sales trends tell a different story.
This shows that online shopping has not yet become the elegance that retailers want, when they start putting billions of dollars into new websites, used to order all items from books to dog food or touch the screen when the mouse clicks. In fact, e-
Business sales growth at companies like Wal-Mart, Nordstrom, Gap and JC Penney has actually been slowing down, although these companies have invested more money to boost online sales.
Nordstrom, an early adop for online shopping, received unexpected revenue last quarter due to unplanned discounts taken in response to a drop in shopper traffic ---
In stores and online.
Macy's also felt a similar slowdown in traffic: trading volumes, including store and online sales, fell by 3.
Compared with the previous year, the most recent quarter was 6%. Total U. S. e-
Commercial sales still outpace physical stores. and-
Mortar position, an increase of 14.
Compared to the previous year, the percentage of the most recent quarter was 1.
According to the Census Bureau, total retail sales increased by 7%.
But peel off sales on Amazon. com --
Products sold by Amazon itself, as well as goods sold by third parties ---
Great changes have taken place in the picture:Amazon e-
Business sales grew by only 4.
The second quarter increased by 5% from the same period last year, below 10.
According to Wolf Research's Aram Rubinson analysis, the second quarter of this year growth of 5%.
Today, as wages rise, gas prices fall and inflation remain stagnant, Americans have more money in their wallets.
However, the share of their income for retail spending is steadily declining, such as a smaller proportion of discretionary dollars for clothing and food, a larger proportion of health care, and education.
The slow growth of established stores suggests that when retailers build shiny new websites and spend billions of dollars on engineers, warehouses and shipping, they don't actually find new customers.
On the contrary, online sales seem to be at the expense of the dollar of the shoptin store ---
Especially for larger chains, where more shoppers can already easily buy goods.
Of course, these companies have no choice: they need to sell goods where customers shop.
As consumers migrate online, retailers must
Store sales or let others (read: Amazon)do it for them.
This mentality can be seen from Wal-Mart's decision in this holiday season that Wal-Mart offers customers the same Black Friday discounts online that have historically been limited to its stores.
Wal-Mart is in a respectable battle with Amazon, but training its customers to stay away from the store will come at a price.
Since 2012, there has been no positive growth in shopper traffic for physical retailers.
As retailers make online shopping more attractive, the decline in store shoppers will continue to be free to fall.
What can retailers do?
Rubinson suggested learning from Netflix. Just running once-of-the-
Netflix, the maker of streaming video, realizes that the best way for prostitutes consumers is to provide original content that they can't find elsewhere.
The new CEO of JC Penney is trying such a way to focus on something more exclusive and private
Label products and outout850 hair salon Co. , Ltd.
Limited use of H & M and Target
Time partnership with high-
Attract the interest of shoppers.
In any case, retailers have to give shoppers a compelling reason to visit their stores and imagine their own version as a new black.
Because a new website or mobile app will not cut it.
Contact the author of this story: Shelly Banjo, sbanjo @ bloomberg, New York.
NetTo contacted the editor in charge of the story: Mark Gongloff from mgongloff1 @ bloomberg.