Much has been written about the decline of retail.
In April, UBS predicted that 100,000 brick and mortar stores could close permanently by 2025 as online sales account for 25% of total retail sales.
Colliers International's Fall 2020 Retail Spotlight Report confirms this general assessment and says the need for physical stores is likely to continue its downward trend through the end of 2020. This will force retailers to take a closer look at how much space they actually need.
"The economic ramifications for brick and mortar stores and retail profit margins will lead retailers to streamline the number and location of stores and consider reducing physical space," according to the Fall 2020 Retail Spotlight Report.
The surge in online sales and the impact of the pandemic are now showing up in retail productivity. In 2014, sales per square foot of retail were $ 396.2 per square foot, according to GlobalData analysis. By 2019, when online shopping became increasingly popular, revenue per square foot had dropped to $ 382.9.
After COVID 19, retail productivity has plummeted. Revenue per square foot of retail decreased to $ 338.3 in 2020. This emerges from the Retail Spotlight Report from autumn 2020.
With rampant layoffs and wage cuts, Americans have less money to spend on goods. When they decide to buy something, they look out loud for an offer
The shift in consumers towards value first value was indeed evident in 2019 – before COVID 19. Resale spending was $ 29 billion last year and grew 25% faster than the broader retail sector, according to Colliers.
Nevertheless, the shift in value has increased this year. In the fourth quarter of 2019, the percentage of consumers who tried to minimize spending by focusing on low prices was between 17.6% and 18.9%, according to a GlobalData analysis. In May 2020 that percentage rose to 32.4% before falling slightly to 29.6% in July.
The resale trend has accelerated in recent months as ThredUp, Depop, Poshmark, and Vestiaire Collective saw double-digit to triple-digit growth. Colliers anticipates that resale will overtake the traditional thrift and donation segment by 2024. A resale value of over $ 80 billion by 2029 is expected, surpassing fast fashion estimates of $ 43 billion.
“The number of consumers looking for deals or discounts to offset essential and non-essential purchases is likely to continue,” said the Fall 2020 Retail Spotlight report. “The opportunities to offer premium products and services are growing be scarce and allow mainstream retail space to create cheap price points to attract customers. "
