It’s incomprehensible to me that people believe that the primary reason retail is going belly-up, is that the rents are too high. Time for a reality check, people!
A crazy rent increase might be the reason why that cute little tchotchke store in your neighborhood closes, it’s certainly not why Payless or Shopko or Walmart are closing stores. And, in hindsight, even that cute little store selling (or not selling?) “adorable” trinkets is probably more likely to have been done in by Kondo-mania than by a rent increase.
The bulk of the 6000 stores closed so far this year are shuttering because there has been an epic culture shift in how we relate to shopping as an activity.
- And, by the way, retailers are expected to close a total of 9,000 stores this year, followed by another 12,000 stores in 2020 (Source: Cushman & Wakefield).
Most of the coverage about retail comes with a NYC perspective because that’s where much of the media is based. Journalists only recently became aware of all those empty storefronts in their neighborhoods. Many of those vacancies are former bank branches, drug stores, diners, and clothing retailers including Gap, J. Crew, Anthropologie etc. etc. etc. And yes, there are examples of horrific rent increases doing in “mom and pop” stores but they represent a tiny portion of the retail closures.
- Nationwide, while cost is a factor in some of the closings it’s clearly not the main reason judging by the states hit hardest by retail job losses over the last decade e.g. West Virginia, Vermont, Rhode Island, Ohio, Connecticut, and Maryland.
- Currently, store closures are hitting smaller cities like Appleton, Oshkosh and Neenah where vacant storefronts include Sears, Younkers, Toys R Us, Gander Outdoors, Shopko and even my favorite, Piggly Wiggly.
Nationwide, empty retail space is now said to easily top 1 million square feet.
Read on below for examples of retail conversions to residential (rare to see this). Plus some of the new ways that Gen Z are shopping.
Retail to Residential
- Downtown Appleton’s Gabriel Furniture will be made into lofts starting next month (below, top pic). It had been a furniture store for 91 years.
PLUS Retail to Trampoline Parks – this I don’t get at all:
Why Wisconsinites think this is a great idea, baffles me but it’s happening. And I predict it will be short-lived.
- In Grand Chute, two former big box retail spaces not far from the mall will become trampoline parks.
- The former Steve & Barry’s space, facing Wisconsin Avenue, will become Altitude Trampoline Park.
Gen Z has eliminated the stigma from buying secondhand clothes. Online resale site ThredUp recently estimated that one in three Gen Z consumers will buy used clothing in 2019. Depop is a good example of how they do it.
Since launching in Milan in 2011, it has amassed 13 million customers in 147 countries, hired 150 full-time staff, and raised $43.6 million in funding.
- Flipping vintage clothes and sneakers can be an extremely lucrative business. Some Depop sellers can pull in as much as $300,000 a year on the app and have been able to buy houses and cars before they’ve even reached college age.
- Depop makes 10% on each transaction.
- Depop is also becoming a valuable resource for predicting trends in fashion with its shopping community often identifying trends two to three months before they hit mainstream fashion.
Shopping has become such a chore – especially now that shipping problems have turned online shopping into such an iffy proposition.
That said, shopping from social media sites like Instagram is so tempting (even for me). I believe it has the potential to be huge. As I’ve mentioned before, you have to do your research if it is a brand you are unfamiliar with. However, for well-known names, I can definitely see myself buying directly off social from my phone. Beats running around town trying to find a pair of jeans or shoes from some store that no longer carries sufficient inventory because “everyone is shopping online”.
I’m curious to explore our changing shopping behavior in more depth. For example, I am dumbfounded at how young guys have become the most rabid shoppers – standing in line for hours when it comes to sneakers and streetwear. Every single Thursday, hundreds of guys are lined up outside of Supreme waiting to get their hands on the “latest drop” and then, of course, heading to the corner to re-sell their wares via some app.
I also know shopping patterns reflect shifts in lifestyle and lifestage e.g. the other day when I was at Hudson Yards, my friend wanted to get something at Muji. I realized I had not set foot in a Muji for 7 years, since I renovated my loft. While doing the renovation, I was constantly in and out of not only Muji but also Crate and Barrel. Nowadays, I only replenish household items. It’s rare that I need something new – in terms of gadgets, the last item I bought was my SodaStream.
And when it comes to clothes, my friend Michael and I were discussing last night how we both have moved more into wearing a “uniform.” For example, this year, I am primarily wearing jeans. I want to get my wardrobe down to just 10 items – all of which I love. I don’t want to look at anything in my closet that I don’t absolutely relish wearing. Additionally, we’re all wearing the same things to work as we wear casually. That shift in itself has eliminated 50% of our clothes shopping.
More on this to come.