Will physical retail stores really die?

I chatted with my colleague a few days ago and learned that he used to be the big boss of a physical retail store that operated clothing business. It took him only five years to build five stores from 1. At first, the market was particularly strong and he made a lot of money. However, with the impact of e-commerce, the market situation was much worse than before. He lost a lot of money to maintain the shop. In the end, he couldn't run any more and had to transfer to another hospital. Now there is only one of the five stores left, and this one is only to sell all the stocks before. The shop was managed by his relatives, and he and his lover returned to the ranks of working to earn a living. I asked him, why don't you stick to it? He said that the market is too difficult to do now, operators are facing the pressure of rent and manpower, as well as the strong impact of e-commerce. With the development of Internet, people have gradually changed the way of shopping, especially clothing and other daily necessities. People are more willing to buy cheap and beautiful things online, which leads to fewer and fewer people patronizing physical stores and more and more serious backlog of goods. If they can't make money, they can't afford the rent and have to close the store.

I think we all feel the same way. With the busy work and increasing pressure, we have less and less time to shop. I wonder if anyone feels the same way. I haven't bought clothes in the mall for several months. On the one hand, I feel that I really don't have time. On the other hand, my concept of clothes is economical and good quality, which can be solved online. I have to say that e-commerce has given us people with "lazy cancer" more excuses not to go shopping. This has led to the fact that the business entity industry is really sorrowful everywhere, and bankruptcy is a common occurrence. Physical stores seem to be the opposite of e-commerce and disintermediation, and the latter has become the terminator of the former.

What causes physical stores to be on the verge of extinction today?

1, the rent of physical stores is high, the operating expenses are rising, and individual operators are unprofitable.

Many self-employed people have this feeling. The store is located in a prosperous location, and the rent is too high to bear. However, if you choose a cheaper location, it will be too remote, the flow of people is a problem, and business is not good. Some shopkeepers first locate their stores in crowded places, and then change their stores to places with lower rents after accumulating a certain number of customers. However, it is also dangerous. After all, people are still willing to choose the principle of convenient purchase nearby, so if they change places, they need to bear the risk of customer loss.

Moreover, operators have to bear various operating expenses, such as water, electricity, taxes, etc., and it is basically unprofitable to remove costs.

2. Rising personnel costs

With the gradual increase in the cost of living, prices are rising, and the wage level is also rising. For enterprises, the personnel cost of hiring an employee is also increasing in direct proportion. Take the first-tier cities as an example, the basic salary of a waiter should be at least 3,000, and the second-and third-tier cities should be more than 2,000. In addition, there should be a commission on sales profits, so that the fixed expenditure of personnel costs should be above 5000 per month.

3. With the development of Internet, information is more transparent and channel competition is more intense.

The development of the Internet has led to the arrival of the era of big data. In the past, we used to shop around, but now we can know where the goods are cheapest, what kind of goods have the best quality, more transparent information and more choices. Coupled with the impact of e-commerce, goods with the same brand homogeneity can be bought cheaper online. When we go shopping, we will see many girls trying on clothes and taking pictures in physical stores, but instead of buying them, they finally place orders online. The physical store took advantage of his experience, but failed to achieve sales.

But will physical retail stores really die? Actually, it is not.

We will see that the business of new convenience stores near the community is getting more and more popular, and the number of retail stores dealing in maternal and child products has also increased from one to two or even more. Near the community, there are new supermarkets for fresh fruits and melons, as well as baking shops. At the same time, the turnover of some retailers is soaring, so physical stores are not facing the risk of extinction, but how to make use of the existing market, change their thinking and keep up with the pace of consumers.

1, omni-channel coverage of e-commerce and entities

Since people's shopping style has changed, physical retail stores can also enter the ranks of e-commerce. Now many shopping malls and brand stores have their own online shopping malls. In fact, there will be no obvious division between entities and e-commerce in the future, and the future trend is the integration of entities and e-commerce. The physical store is used for the terminal experience, and the online unified order can better manage the sales and inventory. Wechat has promoted the development of WeChat business. Many friends around us who do WeChat business feel that they lack the offline experience of products and have begun to prepare to open physical experience stores to help sales. So no matter which channel it is, it is actually just a means to promote sales. Both hands should be hard, whether offline or online. The era of e-commerce has entered the era of deep operation. As far as Taobao is concerned, it is more difficult for some small businesses without funds to make achievements in Taobao, and online traffic will be very painful compared with existing e-commerce. However, the advantages of physical stores are experience, tangible products and accurate customers. If the service is good, the transaction can basically be completed immediately.

2. Introduce information management system to realize sales and inventory data management.

Now, some small-scale retail stores are still using very old statistical methods of sales data. Manual calculation of purchase quantity, delivery quantity and inventory management is inefficient and easy to make mistakes. In the era of network information, this tedious statistical method can be completely replaced. Many free processing software, simple learning can do a good job in sales planning, sales execution and sales inspection, and finally realize a virtuous circle of inventory management.

3. Strengthen offline marketing methods, develop ideas and learn from excellent e-commerce.

According to the location of the store, more terminal marketing activities can be carried out, especially to increase in-store experience activities and promote the flow of people in the store. Learn the online promotion activities of excellent e-commerce, explore new ideas, in a word, learn differentiated competition, learn service attitude, learn promotion methods, learn data analysis, and analyze customers through all channels. At the same time, strengthen the interior decoration of the store, create a good atmosphere of consumption scenes, and enhance the terminal experience of the store.

In the future, physical retail stores will not die out, but will usher in greater development, but in different ways. More precisely, some disadvantages of physical stores relative to e-commerce are just an old pain in the process of upgrading physical stores. What physical stores should do is not blindly follow the trend of closing stores, but think about how to better integrate existing physical stores with e-commerce, complement each other's advantages and give full play to their respective advantages. I believe that in the near future, physical retail stores will still prosper again.