In the last couple years, we’ve heard a lot of talk about the “retail apocalypse” making the world of brick-and-mortar stores seemingly obsolete.
While we have seen a record number of store closures in 2018 already, I would argue that the term “retail apocalypse” is far too general for what’s happening.
Without doubt, some of the largest giants have fallen victim to the e-commerce revolution, with big-box retailers like Sears and K-Mart, and even department stores like J.C. Penney’s, closing up shop.
If you know where to look, though, there are some retailers who have been doing so well with physical retail, they’re actually opening up more stores!
And taking in gains of 90% and more!
As I said, many big-box retailers have fallen prey to the rise of e-commerce and the giant known as Amazon.
There’s a reason it’s been these seemingly too-big-to-fail companies that are falling short, though.
It’s because they’re not doing anything that unique anymore.
Sure, when Sears, Roebuck, and Co. was first established, there was NOTHING else like it.
Sears completely revolutionized the world and practically created the concept of retail.
Unfortunately, the main draw of stores like Sears and Walmart is that they bring a huge inventory of items together under one roof for affordable prices.
There’s no longer anything unique, it’s all about convenience.
And unfortunately for such companies, Amazon was primed to flip all of that on its head.
A website can hold a nearly infinite number of various products and services, far more than could ever be contained in a physical store.
Amazon managed to bring together even more products than you could find in a Super Walmart, and for the cheapest prices around, without the need of a price-match guarantee.
So in that respect, it should be no surprise that those big-box retailers found themselves struggling to keep up and hastily adopting e-commerce platforms.
Luckily, this also allowed us to see what it takes to survive the e-commerce revolution, and the biggest deciding factor I’d say is having a product that people don’t want to just buy online.
What do I mean by this? Clearly, there are some products that we will probably always prefer to buy in person, or at least take a look at in person.
Furniture is such a category, as well as specialty clothing, makeup, and skincare.
Now that’s not to say that no one orders their makeup or clothes or a new bedspread online anymore, because of course they do.
But they’ll usually only do so after having already experienced the product for themselves.
Lululemon (LULU) is an excellent example. The designer “athleisure” brand focuses on clothing that you can wear to the gym as well as out for a bite to eat or to spend time with friends.
With specialty clothing items, especially pricey ones, we want to be able to try it on and touch it and really experience it before we ante up the cash at pay for it.
The quality has to be top-notch to justify the sky-high prices, but LULU has definitely found its place, and customers and shareholders alike have benefitted.
Looking at the stock chart alone, LULU has gone up 90% in the last 6 months!
Now that would be an impressive figure in the best market climate, but considering how the first five months of 2018 have been for the market, that number is especially incredible.
It’d be easy to say that LULU is an exception, just a one-off in this “retail apocalypse,” but it’s not.
Ulta Beauty, Inc (ULTA), the beauty retailer dealing with skincare, cosmetics, bath and body products, as well as salon and styling services, has seen some excellent growth and actually announced they’ll be opening 100 new stores.
In the last month and a half alone, ULTA has gone up 25%.
There are plenty more examples I could throw at you for why “retail apocalypse” might not be the most fitting term, but for now, keep your eyes open so that you won’t miss out on profits like these!
Look for companies who are doing something different, something that can’t be exactly replicated solely online.
Those are the retail survivors, and those will push the cash into your account.
Let’s do this