So I’m reading this great story in The Wall Street Journal this morning about shoppers fleeing physical stores. I could have saved the enterprising reporters Shelly Banjo and Paul Ziobro the trouble and told them it’s because a lot of us can’t be bothered. We’re just not into it anymore. It’s a hassle, it’s a pain, and for those who abhor the process (that would be me), it’s now officially prehistoric.
Still, as the authors point out, this downtick in store traffic is noteworthy, and quite remarkable. They report shopper visits have fallen by at least 5% from a year earlier, “in every month for the past two years.” Further, ShopperTrak says this exodus is apparently widespread, and not just because it’s always raining outside. Even under the best of conditions, it’s been the trend, and retailers are pulling out all the stops to make it stop.
Good luck. I don’t think it will. Because I think consumers find it much easier to point-and-click than drive-and-park. Take me as an example. Long before online shopping became the rage, I was one of its earliest pioneers – even when I KNEW I was paying more. The convenience alone made it worthwhile. And now that online prices tend to match or even beat in-store purchases, well, you can figure the rest of this out.
What’s interesting is how much online buying has changed the shopping dynamic, and might very well make the concept of malls passé. That’s not to say there won’t always be diehard shoppers. Let’s just say my wife won’t be able to carry this shopping cart alone! She insists touching and feeling merchandise beats pointing and clicking it. No doubt, she’s right, and this is coming from a woman who’ll happily spend hours in a mall and come out with one little bag, if she comes out with any bag, at all.
Still, my wife does something that even her most desired retailers should find troubling. She comparison shops. What’s more, she “patiently” comparison shops. She gets a pretty good idea what she wants (down to a hard good’s make and model number sometimes), then at home visits Amazon (AMZN) or a host of other online sites to see if they have said merchandise and at what price. If she finds it cheaper online, bam! She buys!
Clearly my wife is doing more homework, and more legwork, than her notoriously lazy, not remotely curious shopping spouse…but it’s revealing just the same. No doubt, this phenomenon played out in millions of homes across the country goes a long way to explain the dearth of physical shoppers in brick and mortar stores in this country.
The fact that Walmart (WMT) has dramatically upgraded its own online store proves retail giants are betting less on their big-box stores, and more on showcasing and selling the merchandise in those big box stores. If down the road they don’t need to spend as much on those big boxes, it stands to reason they can pass along to their customers those big savings. I figure it’s a win-win for retailers who get it, and the kiss of death for those who do not.
It’s way too soon to say. After all, much of this consumer skittishness – in or out of physical stores – could have something to do with the bumpy recovery and the still-iffy job market. Security breaches at the likes of Target (TGT) and Nordstrom (JWN) don’t do much to help their sales – offline or online. Customers have long memories, and limited wallets, but what no one seems to appreciate in this whole department store drama is that those customers have very limited time. They just don’t have the time to devote to shopping in stores like they used to. Retailers that get that, respect that, and find ways around that will be the winners. Those that don’t, might not even be around.
I suspect that online sales that now account for more than 6% of total retail sales will keep growing at their double-digit pace in the meantime. It won’t be long before they’re 10% of those sales, then 20%, then 50%. And pretty soon, if brick-and-mortar stores don’t get it, the only customers they’ll be fussing over are the few, like my wife, who are more than likely just taking notes, and not buying… a thing.
Neil Cavuto serves as senior vice president, anchor and managing editor for both FOX News Channel (FNC) and FOX Business Network (FBN). He is anchor of FNC's Your World with Cavuto - the number one rated cable news program for the 4 p.m. timeslot - as well as the FNC Saturday show Cavuto on Business. He also hosts Cavuto on FBN weeknights at 8 p.m. In addition to anchoring daily programs and breaking news specials on FNC and FBN, Cavuto oversees business news content for both networks and FNC's weekend business shows, including Bulls & Bears, Forbes on Fox, and Cashin' In. Click here for more on Neil Cavuto.