Many Miami residents have probably had the same thought at some point over the last decade: “hey, what happened to that store on the corner?” In many cases, the answer likely is “the internet made it obsolete.” Physical retail space is under attack by what some news outlets are dubbing the “Amazon Effect,” which is the process of large-scale companies closing stores because the internet marketplace has turned such physical spaces into financial sinkholes.
Consider the recent moves of major brands like RadioShack, Staples and Sears. RadioShack is closing 1,100 stores in the coming months and years. That’s roughly 20 percent of their stores. RadioShack will also remodel their remaining stores to give them a more “modern look.”
Staples, meanwhile, is embarking on a similar store-closure plan, as it intends to shutter 225 stores by the end of the year. Half of the company’s sales come from online purchases, and Staples has also been downsizing it’s remaining locations for the last few years.
Finally there’s Sears, which has closed 300 stores since 2010. Maybe their most symbolic move is about to be made: they will close their flagship store in Chicago in April.
The fact of the matter is the internet has forever changed the way we purchase goods. Nearly $1 trillion in e-commerce sales occurred in the U.S. last year, and within two years that figure should jump to $1.4 trillion. It is a reminder that businesses need to adapt with the ever-changing marketplace they operate in. If those changes require major moves, it behooves the company to know all of the legal ins and outs pertaining to their strategy.
Source: The News Funnel, “A Rough Time For Retail,” March 20, 2014