Do U.S. consumers have too many retail choices? With a number of footwear and apparel companies filing for bankruptcy in recent months, it appears that the strong competition among retail companies — and a growing shift to online spending — is more than the nation’s economy can support.
Brien Rowe, Managing Director of Investment Banking with D.A. Davidson & Co., told a reporter with Footwear News that in such a competitive retail environment, it is particularly important for companies to focus on innovation and creating a strong in-store experience for shoppers.
We’re in a difficult consumer environment – there’s just way too much retail in the U.S. right now
-Brien Rowe, Managing Director, Investment Banking
Brien goes on to say “Teens and millennials are driving a massive migration to online and are also less brand-focused and logo-concerned [than previous generations]. It’s not about behemoth brands anymore. And [consumers] are spending less…Debt is consuming a lot of the cash flow, and some companies are unable to refresh their stores or have interesting merchandise and it becomes a spiral. Sports Authority, EMS and Sport Chalet are great examples of chains having too much retail and not spending enough on making the experience interesting for the customers. They were carrying much of the same goods, and it was not a compelling experience to walk into a Sport Chalet or Sports Authority.”
Brien, whose investment banking work focuses on the apparel and active lifestyle sectors, said younger generations of consumers continue to focus on online shopping. Additionally, consumers are spending less, making it especially important for retailers to find ways to differentiate themselves.
Read the full article on Footwear News.