Retailing is dying
A lot of people attribute the death of brick and mortar retailing to e-commerce giants such as Amazon for ‘eating everyone’s lunch. The main reason why Amazon is on the top of its game is the wide range of products located in one place. Some have attributed the dying of the retail sector as a result of being out-executed by giants such as Amazon. While some part of this assessment is true it does not take into account the changing behaviour of customers as they start adopting new mobile and social media technology.
Retailing is dying due to overbuilding
Some people have attributed the death of retailing to the fact that retailers simply overbuilt. Brick and mortar retailing depended a lot on location. This means that they required a lot of money in purchasing the right property or the right plot of land to build their e-commerce business. The reason why they overbuilt was not the fact that they were stupid and wasteful of their money. They overbuilt because they didn’t know that e-commerce is going to take over the entire retail sector. They under estimated the power of the internet and the popularity of mobile phones and internet devices. Nowadays no one can survive without the internet.
Retailers had miscalculated everything. The rental industry had a standard of allowing long-term leases for well-known retailers. There was a miscalculation on the side of the retailers as they took long-term leases that couldn’t be terminated easily. As public earnings rose there was little time for people to go to stores to purchase their goods instead they started relying on the internet more. The outcome of this storm was that there was low demand for too much capacity.
Retailing is dying due to competing for suppliers
Another central factor that led to the collapse of brick and mortar retailing was the fact that retailers failed to compete for suppliers. The retailers have a large amount of costs in their hands. This includes renting the premises, and labor. This makes them want larger profit margins for their goods.