Retail Apocalypse: Will It Stop With Just the Retailers?

March 29, 2017

A common fear across the United States is that we are facing a “Retail Apocalypse.”   This new term has been coined to express how retailers  are filing bankruptcy and shutting down in droves across the United States.  As the transition from physical retail stores to online retailers continues, the damage to our economy may far surpass just losses in the retail industry .  It may mark a major shift in our economy.  A massive “domino effect” could likely occur that could send our nation into a deep recession.

Retail Stores Occupy Extensive Commercial Real Estate

Commercial real estate is already suffered high losses due to business shut-downs related to the 2008 financial crisis.  The progressive shutdown of retail stores such as Sears, American Apparel, and many others has caused immediate vacancies in commercial real estate across the United States.  Commercial real estate interdependent exists with a variety of other industries.  Many commercial hubs such as malls and strip stores cannot realize profits after they lose their neighbor business.  The loss of accompanying shops or anchor stores will also put them out of business.   

This progression appears to be creating a “domino effect” where more and more commercial space becomes vacant.  Countless jobs and revenue streams will be lost during this process.   Although this is obviously a transitory process related to new technology and online shopping to an extent, a major economic “foundation shaking” is occurring across the United States.  This trend may go far beyond what most people are realizing.

Are Traditional Consumer Products and Service Systems Coming to an End as We Know It?  

Trends towards digital products and electronic items such as phones or tablets are replacing the continual consumer product renewal focus in the United States.   With physical retailers going out, people have less incentive to leave their homes for consumer spending as well.  The trend towards digital products may end up destroying the physical consumer product and service spending dynamic that has driven our economy for the last 50 years or greater.   

Therefore, even domestic production and service industries could be in grave danger as this economic shift continues.   This shift from a “physical” goods and services concept to a more online, digital economic world may be insufficiently categorized as a mere “retailer apocalypse.”   It may simply be complete Economic Apocalypse.  It could very well be the destruction of  consumer economics as we have known and understood it for the last 50 years or greater.  Massive changes and a recession could be ahead of us.  On the other side of the coin, new opportunities will also likely abound. 

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