The retail apocalypse is in full view this holiday season: Former Sears Canada CEO
Legacy retailers such as Hudson's Bay Co. and Macy's Inc. will be left behind by consumers after neglecting to build a foundation in e-commerce before the pandemic, according to Mark Cohen, a former CEO of Sears Canada.
“This trend (of e-commerce) which emerged about 15 or 20 years ago was moving along at an increasingly accelerated clip pre-pandemic and now the pandemic is causing stores to be closed, causing customers to avoid shopping malls and shopping districts from a physical point of view and that trend has accelerated enormously,” Cohen said in an interview on Thursday.
“It’s something that was well underway pre-pandemic, it’s apocryphal the degree to which consumers have moved in that direction today and I suspect that once COVID is in our rearview mirror, the rate of growth of e-commerce will abate a bit, but it’s certainly not going to reverse the trend that we’ve been seeing.”
Cohen, who now serves as director of retail studies at Columbia Business School, explained that the ultimate nail in the coffin for legacy retailers was that many companies neglected to engage with customers online rather than just in-person.
“(Hudson’s Bay) has been late to the party as have many legacy retailers in fully expressing themselves online. They did have a website as did Macy’s but it’s been merely an expression of whatever it is they’re putting on sale each week rather than a portal into the customer’s presence and expectations,” Cohen explained.
“I think that when all is said and done the great American, great Canadian department store has seen its day and it’s on the way out.”
Department stores have been dealt blow-after-blow amid COVID-19 with many companies being ordered to close their doors due to pandemic-related lockdowns and solely rely on their e-commerce platforms to attract customers.
Retailers now face the much-anticipated holiday shopping season, which is the most crucial time of the year for sales and customer engagement.
But, Cohen said with customers no longer being tied to local retailers and with the accelerated expansion of e-commerce offerings amid the pandemic, the apocalypse for legacy retail has finally come.
“I think that the consumer who was tethered to a local mall whether here in the U.S. or in Canada now has no limitations on where they can consider shopping - where they can browse and ultimately where they can transact. They’re literally able to shop anywhere in the world that they choose…(department stores) now no longer hold the customer captive,” Cohen explained.
“This is the apocalypse that was upon us pre-pandemic from a legacy retail point of view, which now is in full view - it’s really something to watch.”