In 2012, I co-founded a company called Tictail: a platform to help entrepreneurs build online shops, and a shopping destination for finding the best emerging fashion and home decor designers from around the world. We decided early on to invest in a brick-and-mortar flagship: Tictail Market. Our one and only storefront is located in Manhattan's Lower East Side, a hip locals-only destination, off the beaten path from the usual tourist shopping meccas like Nolita and Soho. We reach approximately 50 visitors a day-- 2,000 in a month--and we'll capture around 500 emails from the lot. The store makes about $50K a month; rent is $17K.
With a record 7,000 store closings and 662 bankruptcy filings last year, and 3,800 closings (and counting) so far in 2018, the fate of retail continues to look uncertain. Take a look at Amazon to see how ecommerce has changed the retail landscape as we know it, leaving no industry undisrupted. With just a click of a mouse, customers can purchase whatever they want, whenever they want it -- and have it shipped directly to their door. Related: Here Are 6 Weird Ways You're Being Tracked in the Real World While ecommerce offers unprecedented convenience, this is not the end of the road for brick-and-mortar. Customers still value in-store experiences.
Retailers can tap into an immense source of spending power if they can successfully market to Millennials, who currently make up more than a third of American workers. Not surprisingly, considering the world in which this generation has come of age, creative uses of technology are proving to be very effective in accomplishing this. According to research from Accenture, Millennials in the U.S. currently spend around $600 billion annually. By 2020, that number is expected to increase to $1.4 trillion, amounting to 30 percent of total retail sales. Everyone wants a piece of the pie, but many misguided marketers are stuck using outdated techniques in an effort to appeal to Millennials.
According to the U.S. Census Bureau's monthly retail report, retail sales were up 4.5% year over year in April, but online sales grew 12%. Online retailers have long had an information advantage over their brick-and-mortar peers, as they are able to gather vital data about their customers (such as their age, gender, and location) as well as data on things like what people are looking at and how long they are staying on a page. For example, floor-level cameras can track traffic and where people are spending time in stores, and can predict information like age and gender by analyzing video of shoes. Nicholas has been a writer for the Motley Fool since 2015, covering companies in the consumer goods and technology sector.
Doom-and-gloom headlines about the shrinking number of stores in malls, closing department stores, and thinning foot traffic have been everywhere lately, and not without good reason. If one were to venture a guess based on brick-and-mortar store performance, it would appear the U.S. consumer has stopped spending. But in fact, consumer spending has been rising steadily every year since 2009. It's just that an ever-greater number of people are choosing to do their shopping online. According to the U.S. Census Bureau's monthly retail report, retail sales were up 4.5% year over year in April, but online sales grew 12%.