If you’ve been paying close attention to the news lately, then chances are you’ve observed that the retail industry is facing some pretty tough challenges these days. From beloved budget retailers to longstanding chains, the landscape is shifting, leaving many folks wondering—why are so many retailers closing this year?
Earlier this year, Dollar Tree announced its plans to close more than 600 Family Dollar locations. Just last month, Walmart shared its decision to close all 51 of its health centers across five states and is now planning to downsize even further with more cuts to its flagship store across the country. Brands like Rue21, Express, and The Body Shop are also planning to close hundreds of retail stores this year.
So why are so many retail stores—from discount shops to major apparel retailers—closing down in 2024? And how can businesses adopt some new strategies for survival? Let’s dig into it all.
3 Key reasons retail stores are closing
1. Economic pressure and inflation
One of the main reasons we’re seeing so many stores shut down in 2024 is because of the challenging economic times and rising prices. With essential goods getting pricier and government benefits shrinking, it’s hitting lower-income folks hard—and its affecting how they spend their money.
In turn, retailers that cater to this demographic, like Dollar Tree and Family Dollar, are feeling this pinch, too. According to a recent article in the Associated Press, while consumers facing steep inflation are visiting Dollar Tree retail stores more often this year, they’re actually spending less than in years prior.
2. Changing consumer habits and the rise of online shopping
Another significant contributor to the closure of retail stores is the continued shift towards online shopping. Thanks to the pandemic, more and more people are opting for the convenience and endless options offered by online giants like Amazon. This shift, paired with the desire to find the best price due to tighter wallets, means more people are opting for the online retail experience than the in-person one.
The trend towards personalization—which is more easily achieved through online channels—is also presenting a challenge for retailers as consumers continue to demand more of it. McKinsey & Company report that “Companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.” Brick-and-mortar retailers that fail to adapt to these changes in consumer behavior find themselves at a disadvantage, facing declining foot traffic and sales.
3. Strategic missteps and the failure to pivot
Aside from economic pressures and changing consumer habits, mismanagement and strategic snafus have also contributed to the downfall of some retailers. Businesses that haven’t kept up with innovation and changing trends are finding themselves at the losing end of the stick.
With the rise of artificial intelligence (AI) and augmented reality (AR), new technological advances only continue to pop up every year, which puts retailers who are prepared to innovate in the lead. With expectations and consumer preferences always changing, retailers need to stay flexible and adapt quickly.
How retailers can survive and thrive
It’s not all doom and gloom! Despite the challenges facing the retail industry today, there are strategies that retailers can employ to get ahead and thrive in 2024 and beyond. Even small updates and proactive measures can make a significant difference in navigating the evolving retail landscape, so stay agile and get ahead of these trends!
Make improvements to your customer experience
Retailers should focus on providing exceptional customer experiences online, in-store, and even at home. Because consumers now expect seamless experiences from brick-and-mortar stores to online platforms, brands need to prioritize enhancing every touchpoint of the non-linear customer journey. One way retailers can do this is by leveraging SMS messaging to reach consumers directly.
By tapping into SMS as a customer connection channel, retailers can engage on a more personal level, providing updates on order status, offering exclusive promotions, and soliciting feedback to continuously improve the shopping experience. From browsing products online to interacting with staff in-store, providing personalized services, knowledgeable assistance, and streamlined checkout processes can all help foster long-term customer loyalty.
Bridge your physical store and online destinations
Retailers can start leveraging affordable technology to bridge the gap between physical and digital shopping experiences. Implement QR Codes on product displays to provide easy access to additional information, reviews, and online purchasing options. Print QR Codes directly onto to product packaging to offer helpful videos or instructions and connect directly with consumers wherever they are.
Another strategy shaping modern retail is the “endless aisles” approach. Endless aisles essentially allow in-store shoppers to order products that aren’t available, because they’re out of stock for example, and have those products delivered directly to their doors. With a simple QR Code, customers can seamlessly transition to online alternatives, enabling them to place orders for home delivery or pickup in-store. This helps retailers sell more products and also provides a better experience for customers who are ready to purchase.
Take Bitly customer Rad Power Bikes for example. The retailer uses Bitly QR Codes across its in-store locations to point shoppers to their vast array of products, accessories, and information available online. Whether customers are looking to upgrade certain parts or purchase helpful accessories like lights, helmets, locks, and mirrors, the brand’s goal is to make it simple for customers to access what they need, when they need it, fully adopting the multi-channel retail mindset.
“Using QR Codes helps us have a more consistent customer experience across channels. It gives us the opportunity to seamlessly direct people from a retail store experience to our brand website, which is an important part of the customer journey.”
– Lauren Rothering, Senior Brand & Product Marketing Manager at Rad Power Bikes
Optimize your store layout and touchpoints
Rethink your store layout to create immersive environments that captivate customers and encourage further exploration. Incorporate interactive displays, digital signage, and mobile apps to elevate the shopping experience and drive engagement. By creating an inviting and interactive atmosphere, retailers can inspire customers to spend more time in-store, discover new products, and ultimately make more purchases.
One big trend that’s on the rise is in-store gamification and try-on experiences. For example, brands like Sephora—whose Beauty Insider Community boasts more than 30 million members—LEGO, and Barnes & Noble all implement gamification in loyalty programs for growth and to keep people coming back for more.
Similarly, eyewear brand MOSCOT was able to grow their revenue per visit among shoppers who scanned their in-store QR Code and experimented with their virtual try-on tech by 174%. Don’t miss out on the opportunity to provide a more optimal shopping experience when folks are at your brick-and-mortar store—and let technology help!
Prioritize data-driven insights
Retailers should start leveraging data if they aren’t already to gain deeper insights into consumer behavior, preferences, and purchasing patterns—and this isn’t just reserved for big-box retailers, either! Smaller shops can tap into data to tailor their marketing campaigns, optimize product assortments, and make more informed business decisions.
When integrating technology into in-store operations, retailers can leverage valuable data and insights to optimize their strategies. For instance, when farm-frozen food brand Daily Harvest expanded its distribution to Kroger stores across the US, they utilized Bitly QR Code data on freezer wrap placements to identify high-engagement locations. This data-driven approach enabled them to refine their in-store efforts, ensuring maximum utilization and effectiveness at each store location.
Don’t overlook the potential of data—it can help paint a vivid picture of consumer preferences and trends, guiding retailers towards opportunities for growth and success.
Keep innovating and prepare for the future
While the retail landscape may be challenging, retailers can adapt and thrive by prioritizing the customer experience, embracing technology, and leveraging data-driven insights. By adopting a proactive approach and continuously innovating, retailers can position themselves for success in 2024 and beyond, despite the prevailing trends of store closures in the industry.
By addressing the core reasons behind the closures and implementing strategic measures for adaptation, retailers can navigate the evolving market landscape and emerge stronger than ever before. And as a reminder, let’s not forget the backbone of our communities—support your local retailers!