In recent announcements, the above retailers announced their plans to close locations throughout the U.S. Fan favorites Kohl's, Walmart, and Macy's – three of the biggest retail chains to date – and consumer favorite shopping locations – will all be closing down multiple locations. While Kohl's is only slated to close 18 stores (updated list of stores thanks to our user branie!), Macy's will be shutting down 36 locations, and Walmart, a whopping 154 stores. All three moves come from slowing sales and loss of profits in the last several months.
Moreover, Sports Authority has recently announced closure of 140 stores over the next three months due to the evolving retail environment. This is part of their financial and operational restructuring to create a better consumer environment for their shoppers. Considering the increase of online sales and fluctuating economy in general, it's likely that the collective moves have been a long time coming, even if they are a little hard to swallow.
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But despite losing access to some of our most beloved stores, these closures might be a good thing. What is a seemingly large change will now allow each company to work towards a better sales model, one that will greatly benefit the consumer as well. Moves like these prove that companies are doing what needs to be done in order to stay profitable, and they are looking for new ways to benefit their shoppers by opting for new and user-friendly methods. In addition, costs will be down because brands are not bleeding profits and whatever new-fangled sales direction they choose just might be your new favorite.
After seeing the success of outlet stores like Nordstrom Rack and Saks 5th Avenue, Macy's is considering following suit and creating an outlet version of their original brand. It's a method that allows for additional locations, all of which will be able to reach an additional market. Because prices are lower at outlet stores, an entirely new type of shoppers will be brought into these locations. Another perk: outlet stores are usually in close proximity to other discount stores, which offers high foot traffic and steady shopper inpour. This setup allows for product turnover, where bigger stores can ship out their items in order to make room for new inventory without taking a loss or cluttering their own stores with excess sales.
Kohl's also said they're apt to jump on the outlet store train. Both stores are set to announce later this year how and when they plan to move forward with new such ventures.
Meanwhile, Walmart is going a different route: online sales. With Amazon as their biggest online rival, Walmart hosts the retail size to challenge the ever-growing brand. Even the pro-Amazon crowd can get excited about this stand-off because it means lower prices, big rivals on shipping times and fees, and faster customer service response times among other perks. Because both are such established brands, they have more resources to please and more to gain from beating out the other guy.
Although Sports Authority recently announced store closures as well, we do not expect them to open outlet stores. Since there are no stores of that kind for sports apparel and accessories, we believe that Sports Authority will venture towards offering more online deals to satisfy their consumer demand.
More competition means cheaper deals all-around. Companies are trimming the fat, seeing what jobs are providing the most value, and they're making businesses more efficient. This means timelier customer service, better and faster returns, and most of all, cheaper prices. By cutting out the unnecessary, businesses won't have to make up for profits by gouging retail fees, which leaves buyers with a more efficient, well-oiled machine and prices that are as low as possible.
Combined, these changes create a program that enhances the consumer experience rather than just offering what's always been available. It's a progressive move that leads to ongoing shopping support and a platform that is only bound to improve.