While the retail industry has largely shifted to online in recent years, Tom McGee, CEO of the International Council of Shopping Centers, believes there is room for different kinds of product consumption.
“I think in a couple years we’ll stop talking about online vs. physical and we’ll talk about retail and retail will be you know multiple channels but they’ll really operate in a really synergistic way,” McGee said during an appearance on the FOX Business Network Monday.
At the forefront of the industry is Amazon (NASDAQ:AMZN), which is launching its third annual Prime Day from 9 p.m. Monday to 3 a.m. Wednesday – a 25% longer window than it was last year.
Despite Amazon’s success, McGee says it does not completely dictate the industry’s future.
“Amazon has had incredible success but you know Amazon’s an $80 billion retailer in North America…$80 billion compared to almost $5 trillion of retail sales, I mean there’s a huge amount of sales that happen in this country that don’t happen because of Amazon but Amazon is clearly influencing the industry and driving it to change.”
Leading the increased shift towards online sales are Millennials, who are continuing to demand more cost effective and convenient ways to purchase goods.
“I’m bullish on the industry in the long-term because of demographics, because you have this huge Millennial generation that’s going to age into their prime consumption years,” McGee said.
The shift to digital retail will also have a long-term effect on malls as retail bankruptcies continue to rise. The most recent bankruptcies come from The Limited (NYSE:LB), True Religion (NASDAQ:TRLG), Wet Seal (NASDAQ:WTSL), hhgregg (OTCMKTS:HGGG), RadioShack (OTC:RSH), rue21 (NASDAQ:RUE) and Payless (NYSE:PSS). Despite the retail doomsday headlines in the news lately, McGee says that change is not necessarily a bad thing.
“There’s been 3,000 store closures that have been announced but there’s been 2,000 store openings that have been announced as well so I think there’s clearly change going on in the industry, nobody should dispute that but I am optimistic about the health of the industry,” McGee said.