While a recent flurry of store closings and job cuts in the retail sector is seen by some as cause for concern, an industry observer tells Inside INdiana Business, the belt-tightening is a positive sign. "It’s future-proofing the business," said Purdue University retail professor Richard Feinberg. "It’s doing the kinds of things you need to do to survive and grow." Retailers including Indianapolis-based The Finish Line Inc. (Nasdaq: FINL), Walmart and Macy’s announced cuts this month.
This month, Indianapolis-based The Finish Line Inc. (Nasdaq: FINL) announced plans to close as many as 150 stores, Wal-Mart Stores Inc. (NYSE: WMT) plans to close 154 U.S. stores this year and Macy’s Inc. (NYSE: M) says it will shutter 36 stores, a move that could impact more than 4,000 employees across its footprint.
Restructuring, store closings and disappointing sales have been commonplace across the retail landscape and in the midst of slowing in the U.S. manufacturing economy, some wonder if consumers will begin to spend less.
Feinberg is not one on them.
"Consumers are spending, consumers have jobs and money, so it’s not an economic excuse for what’s happening," said Feinberg, who believes "smart executives and smart boards" are making strategic moves based on the future of retailing.
Specifically, how Millennials think and spend money.
"In the next five years, the Internet will be 30 percent of a retailer’s sales, where it is now ten percent," notes Feinberg. "Retail executives who don’t have experience with Pinterest, Vince, Snapchat, social media and how consumers are spending need to understand that."