Analysts Predict Retail Armageddon

The end of retail as we know it. 

Reports declare this the worst retail holiday season in nearly 30 years. An article in the Chicago Sun-Times quoted analysts as saying that “retail names will be wiped off the map and thousands of stores will close in the new year.” Ominous. But what does it mean? If we take a shot at predicting the future, what will retail look like in the year 2009.

Some are predicting that online shopping will replace the retail establishment. In recent years, the Monday after Christmas has become for online what Black Friday is for retail. The rise of social networking, social media and second life suggest that the virtual world will replace the real one.  However, online sales were negatively impacted by this year’s economy as well. Similar predictions were made for the demise of brick-and-mortar banking with the introduction of online banking.  

Some predict the demise of small retailers and the unchallenged reign of the big box. Yet, consumers are expressing exhaustion with the big box format. Walmart introduced the Neighborhood Market and Target tested the Bullseye Bodega.

So what do we know.

Miller Zell recently surveyed over 800 consumers on how the current economy has effected their shopping behaviors. Results from the survey will be presented at the National Retail Federation Big Show Expo in January. The objective of the survey is to determine what is happening in the consumer mind. How will retail need to adjust to this drastic shift in the shoppers’ perception of value? What form of media will most effectively build a relationship between the consumer and the brand?

What we do know is that things are changing…rapidly.  

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