Is Online Shopping Killing Brick-and-Mortar Retail?
American favorite, Toys R Us (TRU), is returning to the market this holiday season, and children couldn’t be more thrilled. However, the retailer’s efforts this year are an attempt at a comeback from their rough history.
From 2010 to 2018, TRU struggled its way through a toxic partnership with online retailer Amazon that ended with TRU’s closure of assets. Although TRU is attempting to revitalize itself with over 400 new stores, the store’s past casts skepticism on its survival today.
“They didn’t make much of a profit, and compared to dealing with the debt from the buyout 10 years before, it wasn’t enough,” Industrial Industries World Radio said in a Youtube video, talking about the debt TRU accumulated while trying to keep up with Amazon.
This trend of businesses being subverted by online competitors isn’t new–major brick-and-mortar chain Sears Holdings has a past with complications caused by the increasingly popular digital market.
“So, when you think of Amazon, you think of the ability to be flexible… to adapt to technology,” analyst Matt Argersinger said in an interview about Sears’ downfall, considering the conflict brought on by e-commerce. “If you’re not, you’re set up to lose.”
Sears was already fighting bankruptcy in 1984 when it underwent a change in leadership, but online competition put the final nail in the coffin for the struggling company, and, by 2019, its stores had dwindled by 97%.
“Sears has been going down the drain for a very long time. There’s no chance of it being revitalized,” GlobalData Retail director Neil Saunders said in an interview regarding Sears’ survival. “You can’t make the economics work with that volume of stores.”
Sears’ persistent struggle with bankruptcy left it with a mere 22 stores, and trying to compete with major online vendors like Amazon quickly gave it a ticket to economic hospice. Sears’ tragic fate casts bleak expectations onto the future of Toys R Us and other modern brick-and-mortar stores.
“Consumers are continuing to go online to purchase items that they previously bought in-store,” Insider Intelligence said in a report about the growing popularity of e-commerce. “We expect online sales will more than double between 2022 and 2026.”
The last couple of decades have proven one thing: online shopping and brick-and-mortar retail cannot exist without competing with one another. With technology becoming increasingly popular, online shopping seems to be dominating today’s market.
“As a ‘winner-take-most’ business, e-commerce revolves around a limited number of companies,” advisor Aurélien Duthoit said in a study regarding modern commerce. “For one job created in e-commerce, 4 and a half jobs are lost in traditional discretionary retail.”
Devyn Sircar is returning to the Bulldog Tribune this year as both a grammarian and a senior. Off duty, she can be found surfing Netflix, playing...