Big Tech and EV Will Disrupt the Shopping Experience through 2030 | Can They Save Retail and Entertainment?
Last year, The UBS Group (NYSE: UBS) reported that some 80,000 retail stores were on target to close in the U.S. by 2026 in what some are calling a “retail apocalypse.” That’s nearly 9% of the remaining department stores that had previously survived a significant loss of foot traffic and years of economic decline.
Globally, there’s been a dramatic increase in store closures, with retail declining from 18% to more than 27% in just a short amount of time. This number, fueled by social distancing restrictions and the lack of interest in public gatherings, began accelerating at the onset of the Covid-19 pandemic with a lack of certainty on the rise.
Experts expect e-commerce to continue driving store closures, citing that online sales have increased more than 50% for major big-box retailers.
Coresight Research predicts that roughly a quarter of all operating stores will completely close in the next 3 to 5 years. And while some media outlets don’t believe this will really happen, they do believe that some 250 malls will become mixed-use facilities — places for shopping, entertainment, health and wellness.
Since July 2021, Cushman & Wakefield PLC (NYSE: CWK) reports that more than 700 anchor stores have vacated local malls. While some have closed for good, department stores, such as Macy’s (NYSE: M), have actually pumped breaks on their previous plans to close their doors completely. Instead, many have learned that moving to areas away from the mall would send their sales soaring and are now opening doors elsewhere.
In 2019, the U.S. saw a record year in bankruptcies, with more than 9,832 cases of total retail failure. In 2020, more than 8,700 stores were shuttered. This does not include the many mom-and-pop locations that have earned their place among the communities they served.
In 2021, there’s been somewhat of a stalemate in some cases. While similar records have been met, we’re seeing a turnaround in numbers with businesses expanding and locations staying put. Most of this comes on the tail of modernization, the adoption and advancement of technology, whereas most companies transformed existing models to appeal to the…