As we witness many businesses announcing bankruptcies or even store closures, these ultimate signs aren’t necessarily negatives for the entire retail industry. To begin with, these store closures are helping with the retail overcapacity problem as there were an approximate 23.5 square feet of retail space person in the United States last year. Take a look at these three reasons to look forward to the industry’s future!
National Reduction of Retail Debt.
First, the retail industry is beginning to reduce the high levels of debt that have been recorded in recent years. Currently, the United States has a total of $1.9 billion in debt and as some retailers gain control of their finances, the overall retail debt begins to decline. Reducing the debt helps companies have more cash liquidity, and it could reduce long-term indebtedness. For many companies, it will give them more breathing space that is much needed. Moreover, the economy has been improving each and every year which adds to the rising wages for consumers and thus increases the amount of money that a consumer has to spend.
Improvement of Retail Overcapacity.
Furthermore, all of the bankruptcy and store closing announcements are ultimately helping the retail overcapacity problem. There was an outstanding amount of retail space recorded per person in the United States last year with approximately 23.5 square feet per human. In comparison with our neighboring country of Canada, they have an approximate 16.4 square feet f retail space per person and 11.1 square feet per person in Australia. Overall, America has nearly six times as much retail space per capita.
Improvements in Customer Experience.
Lastly, the importance of a business falls under the task of creating loyal customers and two key ways for developing a good customer experience is through marketing and innovation. Many retail stores are incorporating different strategies to make a customer want to shop in that store again, for example, offering special events and more store engagement. Retail giant, Nordstrom contributed to Shoes of Prey to allow their customers customize a pair of heels or flats. By incorporating experiences that can become memorable for someone will increase the probability of a customer returning.