What’s to Come After the Loss of Retail Golden Age?
All it takes is a few clicks on your mouse and access to the Internet, and you are literally shopping in a store within your home. So what's the problem?
Many retail companies blame the decline in sales to the rise of e-commerce, such as Amazon. However, Sears Canada is one of the first retail store chains who adopted virtual shopping services back almost twenty years ago (1998). Why has the Canadian pioneer of e-commerce failed to continue its ruling of the retail empire? Clearly, the downfall of Sears does not link automatically to the success of internet shopping platforms.
Department stores like Sears, targeting the demands of the middle class consumer, are experiencing significant loss of customers lately. In simpler terms, the middle class is demographically shrinking in size. Companies are not the only victim of the phenomenon.
The impact of store closure hits the employees, people who shop, and the chain of suppliers depending on the sales from these stores. More than 12,000 jobs are at stake and hundred of thousands of investments would go to waste. As much as economics and societal balance are influenced, there are other political impacts triggered by this issue.
It is these middle class consumers, living in the suburbs, that are a demographic group of electorate that most politicians aim at in political campaigns. Statistics demonstrate that if one store shuts down within each riding, more than one third of MP's nationwide will experience difficulties in cultivating votes from their ridings. Supposedly, if most politicians recruit votes concentrating on the dwindling group of middle class voters, would they be the next Sears that becomes eliminated from Canadian society? Unbelievable as it sounds, this could be the reality in the near future.
Even Canada’s Prime Minister, Justin Trudeau, has stated that “the middle class and those aspiring to join it” would remain the focus for the majority of his campaign activities leading up to 2019. Evidently, he is going to need to target the second part of his statement.
Going back to the question in the title of this article, it's difficult to foresee what to expect in such a turbulent era of business and retail. Even a traditional store chain in Canada, Sears, has been approved by court to undergo liquidation sales beginning October 19, 2017 and lasting to January 21, 2018. We all need to be consciously making choices to prevent worsening of economic warning signs such as the failures of retail businesses.
