WSJ editor challenges ‘retail apocalypse’ notion

“Ninety percent — that’s the percentage of retail sales still done in stores,” said Lee Hawkins, a Wall Street Journal news editor. “It’s been dubbed a retail apocalypse, but the reality is more nuanced.”

Though Internet retail has taken a chunk of the book, music and movie sales of physical retailers, its impact on the sales of home furnishings, personal-care products, food and cars is less pronounced, Hawkins observed, noting that only 5 percent of the $726 billion in U.S. food-and-beverage sales annually is conducted online. “This comes down to customer behavior,” he said. “No matter how convenient Amazon is, people prefer to buy certain items in person.”

Meanwhile, physical retailers are harnessing Internet retail to get more customers through their doors, Hawkins notes. More retailers are adopting omni-channel click-and-collect strategies — by which customers order merchandise online for pickup in stores. Some, such as Walgreens and Nordstrom, are forging alliances with brands to enable customers to collect and/or return merchandise that is not even carried in those particular stores.

Meanwhile, digitally native brands are busy opening stores in their own right, observes Hawkins, citing a JLL prediction that roughly 850 of them will do so over the next five years.

“The shift to online is happening more slowly and more unevenly than it might seem, and retailers are evolving to accommodate a greater range of customer behavior,” Hawkins said. “Altogether, the retail landscape looks less like an apocalypse and more like a retail transformation.”