Will struggling retailers find new lives as pure play e-tailers?
In recent years, successful e-tailers have begun to realize that they can do even better with some sort of brick-and-mortar presence. But some struggling physical retailers are taking an opposite tack, ditching their real estate with plans to operate only online.
In an effort to avoid filing for bankruptcy, women’s apparel retailer Bebe plans to close its stores and conduct sales solely online, according to Bloomberg. The company has about 170 physical retail stores. Apparel retailer Kenneth Cole has likewise announced that it is planning to focus entirely on its online, international and wholesale businesses, closing most of its physical locations.
Bebe’s closure is perhaps indicative of the overall decline of shopping mall retail. Among other once-popular mall chains that have closed down recently, as reported in People, are The Limited, Wet Seal and BCBG Max Azria.
Bailing out on the physical retail world might be a good way to get out from under the cost of leases, but e-commerce is not without its expenses. Driven largely by Amazon’s level of convenience, consumer demand has grown for free shipping, as well as premium shipping offerings like same-day and even two-hour shipping.
But such demands have not stopped some small, online-only apparel retailers from being very successful. ModCloth, for instance, built a sizeable following selling clothing by indie designers. The company’s recent acquisition by Walmart demonstrates that such e-tailers are on the radar of some of the world’s biggest retail companies. The acquisition, however, has proven controversial with ModCloth’s customer base, who took to social media to register concern about the business compromising its ideals.
Nevertheless, it was ModCloth’s indie appeal that built the brand to begin with. Retailers that are associated primarily with the mall may have to do some legwork to define an e-commerce niche.
Though Bebe is treating its remaining brick-and-mortar presence as a drain on resources, some apparel retailers have managed to succeed with no e-commerce presence at all. For instance, Irish fast-fashion retailer Primark has had success sticking strictly to a limited number of brick-and-mortar locations and not selling online.
- Bebe Plans to Shut Its Stores and Focus on Web Sales – Bloomberg
- Bebe Is the Latest Mall Store Closing Retail Locations – People
- Shoptalk recap fulfillments faster freer finale – RetailWire
- Walmart buys online clothing seller ModCloth – USA Today
- Can Primark conquer America without selling online? – RetailWire
DISCUSSION QUESTIONS: Will we see other struggling retailers become online-only concerns? What will such retailers have to do to succeed online after failing in brick-and-mortar?