On Thursday, Macy has announced that it is closing 100 stores but it isn’t because Americans are not spending anymore. The chain department store is apparently under a lot of pressure from online retailers which have lured in many of its customers.
Online shopping is much more convenient for U.S consumers as they no longer have to pay the full price, wait for the annual sales season, or drive the car to their local mall. They can also purchase their favorite products from the comfort of their own homes.
Additionally, with services such as Amazon Prime which offers free shipping in just two days it is incredibly hard for brick-and-mortar stores to keep up. Walmart has announced that it is revamping its online business by forking out $3 billion for an e-commerce startup which may grant it an edge against Amazon.
Macy’s said Thursday that the 100 locations it is about to close are currently more valuable as real estate than stores.
Other legacy retailers are trying to survive with aggressive discounts which push sales up for the moment but they cut deep into profits and irk long-time partners. Furthermore, this strategy doesn’t pay off in the long run.
With Amazon on the scene, Americans are no longer reliant on the country’s dense web of shopping centers. They no longer have to dress up, get their kids in the car, and drive to the mall or the department store as they used to. They can now order even toilet paper online, and this shift has happened in less than a decade.
Outlets and discount stores such as T.J. Maxx also seem to thrive despite long recession and sluggish economic growth. According to a federal report, consumer spending rose 4.2 percent in spring.
Even though Americans are still big spenders, they have recently turned into bargain hunters both online and in stores, analysts noted. Analysts also said that many Americans no longer see a really good reason to go to a store physically when they can stay at home, in their pajamas, and shop on their tablets.
This mentality has forced retailers either close doors or open outlet stores to lure in new customers. Marshalls and T.J. Maxx’s success can now be explained through the big savings they promise. Macy’s also has an outlet division called Macy’s Backstage.
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