Strategies to survive the tidal wave of retail closures

Have there been times in your life when you’ve looked back at some mistakes you’ve made and said to yourself, “I should have seen the handwriting on the wall”?

For retailers today, the “handwriting” is appearing in business news headlines like:

  • These major retailers are closing more than 3,000 stores this year,
  • Stores are closing at an epic pace, CNN Money
  • “The Retail Bubble Has Now Burst”: A Record 8,640 Stores Are Closing In 2017,
  • More than 3,200 stores are shutting down — here’s the full list, Business Insider

You would recognize most of the names on these lists. Some, like Sears, RadioShack, and K-Mart, wouldn’t be surprising, but others – Bebe, CVS, and Abercrombie & Fitch, for example – are more of a surprise. (It just doesn’t seem very long ago that Abercrombie & Fitch was killing it and retailers everywhere were trying to clone its approach to retailing.)

It’s no secret that much of this disruption is being caused by online sales. If you look at the various lists of retailers closing stores, it’s like taking a stroll down the center aisle of your favorite mall from the anchor store at one end, to the anchor store at the other. Malls are being replaced by online mega-sites like Amazon.

Phil Wahba has a great article on Fortune that details how the Simon Property Group is fighting to “reinvent” the shopping mall. I’ve heard about big hunks of shopping malls being taken over by medical groups, fitness centers, public libraries, public schools, and all sorts of other “mixed use” tenants. Often some stores will stick around as well.

These repurposing efforts could create opportunities for local entrepreneurs. Keep tabs on the ups and downs of your nearby malls and look for news about possible redevelopment projects.

There are two other approaches to consider if you don’t want to get caught up in this retail disaster:

  • The if-you-can’t–lick-’em-join-’em strategy, and
  • Selling items that aren’t sold over the Internet.

Join the crowd

As I said above, online portals are replacing malls. In addition to Amazon, eBay and Walmart are notable. You may have recently seen that Walmart is tweaking its shipping charges to compete better with Amazon Prime deals.

Walmart has a “marketplace” program for third party sellers; it’s their version of the Amazon Associates program. Sears has a marketplace program as well, and so as does (formerly

An aggressive approach would be to get your products included in as many online marketplaces as possible. Inventory tracking and order management are the hurdles you need to clear to pursue a multi-channel approach like this. Software packages and cloud services are on the market, but they can get fairly pricey. Orderhive is highly rated on and has inexpensive entry-level pricing.

Specialize in non-online products

Some things may never be sold online, others are probably years away. For example, I don’t think anyone will be selling puppies online very soon…at least at the big shopping portals. Other items, like liquor and cigarettes, are illegal to sell online. (It’s interesting to note that liquor sales is one of the categories that is also pretty recession resistant.)

Anything that can be customized will be somewhat immune to online competition as well as items that people need to experience first-hand before buying. High-end musical instruments and other items for artists, such as ballet shoes, are items that are typically purchased “in person.”

I think we can also chalk up what I believe is a recent up-tick in consignment stores to the desire to escape online competition. Although eBay is a huge center for used items, I believe local second-hand stores will continue to thrive.

Other opportunities

I’m going to go down a short rabbit trail to illustrate a point. When the price of oil plummeted last year, it caused havoc in the shale oil industry. There were a number of bankruptcies and others cut back operations and hunkered down as best they could. The result of this was to bring costs in line with the economic reality of lower oil prices and the shale oil industry rebounded.

Eventually, the same thing will happen in retail. Rents will come down to levels that support profitable selling. The stronger players will be left on the field. New opportunities will appear.

Hey, in the meantime, there will be a lot of surplus shelving, racks, and other infrastructure items from shuttered stores for sale at bargain basement prices.

That, in and of itself, will be an opportunity for someone.