America has too many stores, too much inventory, and too few shoppers. Macy’s, JC Penney, Sears, J. Crew and other major retailers have already announced that they will be closing stores because in the new retail landscape they cannot justify the return on these expensive fixed assets – and because customers no longer choose to spend their money in old-model retail stores. The market capitalization of American department stores dropped nearly $80 Billion since 1999, according to Census data. The cost of disruption is more than store closings and diminished market caps, it's people and jobs. Macy's and JC Penney, alone, will be closing over 200 stores and eliminating over 12,000 jobs. You can not shrink your way to success. However, you can buy yourself more runway.
Once upon a time… business success was based on providing a narrow segment of consumers with a narrow segment of products, uniquely suited to their needs, sourced and advertised locally, and sold at a local store. Over time, the spread of mass media - TV, national newspapers and magazines - along with the expansion of national retail stores, and the growth of a global and highly efficient supply chain, led to a world of mass marketing, mass production, and massive retailers. The retail world moved from personalized products for localized, niche markets to mass-produced products for mass markets. Mass marketers thrive on "must-have" items - huge volumes of single styles, sold across many market segments to an audience of consumers eager to have the item they saw advertised in mass media, and which, in turn are produced in great scale and efficiency. This strategy worked. Until it didn’t.