The news in corporate America has been generally very positive, with high earnings and positive potential for momentum and innovation in technology, energy, and financials. However, the creative destruction of capitalism means continuous change. This continuous improvement will inevitably leave some business models behind. Retailers in particular look ripe for disruptive change. Concentrated shopping destinations (i.e. going to the mall) already faces pressure as online stores improve in product delivery time, idea generation, capitalizing on impulse buys, convenience, and personalization. Similarly, we also seem to be at an inflection point where technology has created the capacity to change business models at distributed location. For instance, Amazon’s new checkout-line and cashier-free shopping experience – Amazon Go - is being tested in Seattle right now and it could revolutionize grocery shopping and convenience stores.
Analysts have been warning about the cannibalization of online and mobile shopping stealing sales from traditional brick-and-mortar retailer for decades. Disappointing holiday sales for many “anchor” mall or strip-mall stores in 2016 created the final nail in the coffin for several businesses. The past few weeks has demonstrated significant evidence of this trend, with hundreds of traditional brick-and-mortar stores closings including The Limited, Sears, Kmart, and Macy’s.