Monday June 01, 2020 |Notes

Furthering the demise of physical retail

Over the past few days, there have been countless protests against racial discrimination in cities across the United States. While most demonstrations have remained peaceful, there have been acts of violence and destruction, often in the form of looting businesses, by people with little or no affiliation with the groups behind the gatherings. Regardless, acts like this will serve to hasten the decline of physical retail.

Physical retail has been on the wrong side of the shift to digital commerce for years. The coronavirus pandemic has pushed this shift at a much faster rate with stores closed or limited in capacity to serve customers, many of whom may be reluctant to return to physical stores anytime soon. Large retail chains like JC Penney, Pier One, and Neiman Marcus have already gone out of business, and there are surely more to come.

With the threat of inventory theft and physical damage to stores, there's less reason for businesses to continue to make fledgling retail locations work, rather than investing in digital commerce efforts. Of course, when stores close, there won't be new businesses ready to fill the empty real estate right away, leading to more vacancies.

It's a worrisome trend that feels somewhat inevitable at this point. Digital commerce will continue to thrive, while physical retail declines, furthering the divide.

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