In 2020, the holiday shopping season at Macys is different from before. The Thanksgiving Day Parade in New York will be held without a live audience, and Santa Claus will not appear in the old place on 34th Street to check the Christmas wish list.
Although the threat of the new crown virus has passed, many traditions may return to people’s lives. The changes that have taken place at Macy’s during this holiday shopping season indicate that the epidemic may change the company’s sales methods forever and even reshape the entire retail industry. .
At the beginning of November 2020, the two Macy’s in Delaware and Colorado changed. Mall employees turned the store into a “dark store”, that is, as a fulfillment center for online order and return services, rather than a place for customers to shop and shop.
Macy’s CEO Jeff Gennette (Jef fGennette) said that the company is responding to the surge in customer demand for online shopping and speeding up the speed of free delivery, “behind the scenes store” is part of the pilot project. However, even if the practice of turning a department store into an order fulfillment center is temporary, this phenomenon reflects the fact that retailers are making concessions to the dominant e-commerce and are also scrambling to save entities with a weaker presence. Shopping space.
Long before the epidemic broke out, the power to promote online shopping emerged. However, in the past seven months, the decline of many physical stores and the simultaneous growth of e-commerce business have made us watch the evolution of the retail industry and the broader impact of the industry on the economy like a fast-forward broadcast. 2020 will be regarded as a major turning point in the development of the retail industry.
Vince Tibone, a senior retail analyst at Green Street, believes: “The COVID-19 pandemic has advanced the negative impact that would only happen in five years to 18 months.”
Walmart, the largest retailer in the United States, said in a recent report that its e-commerce sales increased by 79% in the third quarter of 2020, while rival Target said its e-commerce business increased by 155%. . Amazon’s sales increased 37% in the most recent quarter, and profits soared by nearly 200%.
Retail executives said that the shocking performance growth was not due to accidents that occurred during the epidemic, but because of permanent changes in people’s shopping methods.
“We believe that the new customer behavior will continue to a large extent.” Wal-Mart CEO DougMcMillon said after the company released the latest sales and profit data.
It is undeniable that physical stores have suffered a lot. According to data from the real estate industry data provider CoStar Group, in early December, the number of merchants that announced that they would close stores in 2020 climbed to 10,991. Many shopping centers are in trouble because tenants cut the number of stores, cannot pay rent, or exit the market by declaring bankruptcy.
“The retail industry has changed. It has indeed changed.” said Daniel Horrigan, the mayor of Akron, Ohio. In December, Amazon opened a new order fulfillment center in the city, creating 1,500 jobs. “You can’t stand before that wave.”
The new Amazon Center replaces the beloved shopping center in the past, where Sears, the electronics store RadioShack and York Steakhouse were all open.
The 54 acres (approximately 21.9 hectares) of land has been vacant for 10 years. Horrigan said: “It looks like a huge haunted house.”
A few years ago, Horrigan participated in the South By Southwest Festival in Austin, Texas, and pitched Amazon’s idea to redevelop the shopping center.
Officials in the city and state agreed to upgrade roads and overpasses to make it easier for Amazon’s trucks to drive into buildings close to the main highway. In this transaction, Amazon also received tax relief.
“The shopping mall used to be full of fireworks, with kids, popcorn, and concerts everywhere,” Horrigan said, spending most of his life in Akron. “Every Christmas, there will be crowds here.”
Before the outbreak, some famous shopping places in New York were not visited by many people. Macy’s announced news that its sales have fallen by more than 20% in the past three quarters. Due to the absence of tourists and office workers, Macy’s and Bloomingdale Department Stores suffered a particularly severe blow. Some employees said that sometimes there are more employees than customers.
Brenda Mosse (Brenda Mosse) has been working for Bloomingdale since Christmas 30 years ago. She said: “Some people come to the mall, but they don’t consume.”
According to data from the real estate services company CBRE, throughout Manhattan, the number of retail leases signed or renewed in the third quarter of 2020 fell by 31% year-on-year, and the rents of large shopping malls fell by 13%. Rents have fallen for 12 consecutive quarters. At Hudson Yards, an internet celebrity landmark located on the west side of Manhattan, Nimman said after opening for more than a year that it would bid farewell to the 188,000 square feet (1.75 hectares) store.
“When prices are cut, some retailers will return.” said Santiago Gallino, a professor at The Wharton School of the University of Pennsylvania, who studies retail. “But their stores will not Return unchanged. They must maintain close linkage with online business.”
The physical space required by retailers will inevitably be reduced, but it is still unknown which format will fill the rising vacancy rate, so in the foreseeable future, Manhattan stores are likely to remain idle.
“For the economy and the retail industry, this transition is exciting and a good sign,” Gallino said, “but this process will definitely experience pain.