Like dominoes on a game board, Kenosha County brick-and-mortar retailers have begun falling, leaving some local consumers wondering why their favorite department store or retail shop had to close.
Three years ago when JoAnn Fabrics closed, a few crafters knew they would have to trek to Racine to find their favorite fabrics.
Then Sears, a longtime department store many had grown up loving, fell by the way side in 2017.
Five months later, Big Lots closed, followed seven months later by Tuesday Morning, an off-price retailer.
Then last month regional department store chain Shopko and Payless Shoesource announced they were closing stores in May.
Some call it the “retail apocalypse.” So what’s killing off our favorite stores?
Some retail industry professionals and economists blame Amazon and other online retailers for causing their collapse. Others say changing consumer habits and other factors are contributors as well.
Even before e-commerce, retailing was always a tough business because it often was a seasonal guessing game, with retailers having to manage their inventory properly to avoid overstocking then having to discount merchandise or understocking, thus missing a sale, said Marquette University’s Doug Fisher, director of supply chain management unit of the College of Business Administration.
“This all comes down to inventory management and availability,” he said.
“Now, accelerated by Amazon, this model has changed. A consumer gets infinite selection, at reasonable prices, with (often free) delivery to my home (with free returns) — all by sitting in my home, office, meeting, airport, hotel or coffee shop.
“Estimates now indicate that 30 percent to 50 percent of foot traffic that traditionally drove to stores is now shopping online.
“That might mean stores are 50 percent too big though they still need to offer selection.”
Availability and quick delivery have become the game.
“In March of this year, Amazon had 386 warehouses of various descriptions in the U.S., with 53 more planned, and more to come after that,” Fisher said. “There are another 464 in the rest of the world with 25 on the drawing board.
“In order to have the intended delivery speed, they must locate inventory very close to the consumer.
“Interestingly, Walmart already has a store within 5 miles of 70 percent of the U.S. population. They just need to figure out how to use them as (distribution centers) as well as stores.
“The consumer now has a channel for shopping, known as omni channel — order online, pick up in store; order in store, deliver to my home; order anywhere anyway, have it delivered anyway, anywhere,” Fisher said
Stephen Yalof, the chief executive officer of Simon Premium Outlets, a unit of the Simon Property Group, agreed.
“Customers have changed their buying habits. Over 90 percent of customers will research what they are buying. The retail industry has become a multi-channel.”
Making the shift
While some retailers have struggled to shift from their traditional mode of merchandising, some companies are beginning to figure it out.
Best Buy, for example, is doing a great job of filling online orders through its existing stores, Fisher said.
“This is an incredible inventory management and logistics challenge,” he said. “Home Depot is figuring it out (as well).”
Mall makes it work
And they are not alone. Another retail model, the outlet mall concept, has brought new excitement to the retail industry.
In Kenosha County, the Pleasant Prairie Premium Outlets mall, with nearly 100 brick-and-mortar stores, has become a destination for shoppers.
The Pleasant Prairie mall operates on a Simon model that calls for constant research, improvement of properties and providing a retail mix based upon consumer trends, top brands and price.
“Our mission statement emphasizes value, fashion and great customer experience,” Yalof said.
Yalof said the mall is “constantly elevating the brands and quality to bring customers back. When we get a customer in for a first visit, they’ll come back for more visits.”
In addition, the mall is designed so that the storefronts face each other, giving the customer better access, the feel that they are not far from the next store, Yalof said.
Moreover, “The product is on sale every day,” Yalof said. “Prices are 30 to 65 percent off everyday. We ensure all retailers are (having sales) every day.”
Customers also come because of the amenities, he said — the juice bars, the salad bars, the fast and healthy food options. Additionally, the mall offers a VIP Shoppers Club and rewards.
Simon, with 75 outlet malls in North America, is successful because the objective is to keep bringing in the newest brand.
“Brands tend to time themselves out. We bring in new ones to replace them,” Yalof said.
He described the Pleasant Prairie Premium Outlet mall as a brand with many brands within it.
“We want to give customers that new customer experience. We want them to feel their visit is a special event.”