Our offices are located on Michigan Avenue, otherwise known in colloquial terms as “The Magnificent Mile,” which is paved with one retailer after the next. You can find Ulta; you can find Nike; you can find Gucci; you can find Crate & Barrel; you can find Gap, Nordstrom, Ralph Lauren, Tiffany & Co., and the list goes on and on.
Oh, and you can also find lots of “sale” signs.
What we see in terms of “sale” signs on Michigan Avenue is probably no different from what readers see in their own shopping districts and/or malls these days. Many brick and mortar retailers, and especially the apparel and accessories retailers, are hurting for traffic as consumers have increasingly embraced e-commerce for their spending activity, partly because it is convenient, partly because it takes less effort, but mostly because that’s where lower prices can be found.
The fact of the matter in the apparel and accessories world, where true differentiation and competitive moats are hard to come by, is that full-price selling doesn’t sell for the average consumer. What sells as a traffic driver are big discounts.
Amazon, in effect, is ruling the retail universe with an invisible hand and retailers have no choice but to perfect an operating strategy that combats Amazon’s ever-present, always-on, competitive threat.
This post was published at FinancialSense on 07/17/2017.
Follow on Twitter
Recent Comments