More major retailers close their outlets in 2018-and why they are doing that

Store closures will continue in 2018. More than 3,800 outlets are expected to close in 2018, as an analysis by Business Insider said.

Children toys’ giant Toys R Us are planning to shut its more than 800 stores across the U.S. The retailer had liquidated around 180 outlets, under both the Toys R Us and Babies R Us banners. The New Jersey-based firm filed for bankruptcy protection in September 2017, weighed down by almost US$ 5 billion in debt.

Besides Toys R Us, other retailers have already shut or are in the process of closing their stores. Gymboree, for example, would shut down their 350 stores after filing for bankruptcy in June 2017. As of November, the company had closed 248 stores. The Children’s Place is going to shut 144 stores by 2020.

Despite some openings from Target , Warby Parker, and Ulta, those will not be able to fill in the gaps left by Toys R Us, J.C Penney, Sears Holding, Payless ShoeSource and Bon Ton.

Macy’s, for example, shut down 60 stores last year, including one in downtown Minneapolis that opened in 1902. Shoe retailer Payless ShoeSource will continue the closure of 400 stores after filing for Chapter 11 last year.

Why does this closure happen?

Many people assume that the Amazon invasion has successfully hijacked consumers of conventional stores. The real problem, however, is not that simple.

Most of the retailers had been in debt to finance their stores, forcing them to file for bankruptcy. Claire’s Stores filed for bankruptcy last month and announced it reached a deal with creditors for the restructuring of around US$ 1.9 billion in debt.

Others also pointed fingers at the failure of conventional retailers for not being able to adapt to what millennial consumers want. For example, baby boomers wanted products that were global, commercial, and able to show their status. Gen z want stuff that is eco-friendly, locally-sourced, and authentic.

E-commerce puts brick-and-mortar stores under pressure

The presence of online stores makes shopping more convenience as consumers can do it with just one click. The trend is happening globally. According to a survey in 2016 conducted by analytic firms UPS and comScore, online purchase increased to 51 percent, compared to 51 percent in 2015 and 47 percent in 2014.

The study by Pew Research in 2016 revealed that 80 percent of Americans made at least one online purchase.