store closures

Store Closures Would Lead to Amazon’s Gain

With store closures occuring around the world in the thousands, good times are in the offing for Amazon, according to an analyst from Goldman Sachs.

If the closures continue at this rate, an estimated 12,000 retailers will be out of business by the end of 2019. Meaning consumers will be spending their money on online stores, primarily Amazon.

“With apparel & accessories recording the largest share of store closures, we believe Amazon will be a primary beneficiary considering this segment already sees (more than) 20% online penetration.” – Heath Terry, Financial Analyst, Goldman Sachs

Terry said the situation of physical retailers will work out in Amazon’s favor as it has greater access to consumer data and a speedier delivery service. Also, the company’s $800 million investment in same-day delivery will surely encourage more customers to purchase from its eCommerce platform.

The Rise of Personal Styling Service

Shirts DisplayAs consumers move from traditional stores to the internet, there will be a greater demand for companies like Stitch Fix, explained Terry.

The concept or personalisation isn’t a new one, and has been something that the high street should have been focusing on as one of the few areas that they could compete with online.  The other notably being convenience.

As Amazon led the way with same day delivery, that left just personalisation, and now other online disruptors are finding ways to bring that online too.

Stitch Fix is just one of many online firms that ship clothes and accessories handpicked by a professional stylist to suit the personal style of a subscriber. The company is continuously expanding to tap on markets outside of New York and California.

Terry pointed to slow or declining sales growth, leveraged balance sheets, and rising occupancy costs as the reasons for the massive store closures.

What do you think of stores preparing to shut down instead of stocking up for the lucrative holidays? Share your thoughts in the comments below or in our Facebook Group.

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One Comment

  1. crackerjackcommerce says:

    The bigger Amazon and other leading brands get, the more resources they have to capatlise on what the buyers want: convenience, choice and low prices. I think the High Streets have struggled as the smaller stores simply do not have the resources (technology/logistics/marketing) to compete.

    The small stores are closing and in turn the bigger stores keep getting bigger.

    In our experience recently, for Independent Traders, it is the out of town stores/garden centres doing well and the small specialist boutiques/online merchants.

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