Department stores and specialty retailers have faced declining sales recently.
Macy’s recently announced that it will be shuttering roughly 100 stores, right on the heels of its sixth quarter of declining sales.
There’s a myriad of reasons that stores could be struggling
But there may be a problem that few people are addressing: there haven’t been any items in stores that consumers think they need to have.
“Since 2010-2012’s strong skinny/coloured denim cycle, apparel retailing has suffered from a dearth of must-have items, save the athletic bright spot,” RBC Capital Markets analysts write in a recent report.
RBC isn’t the first to notice this.
In the winter, analyst and founder of consulting firm A Line Partners, Gabriella Santaniello, pointed out something similar to Business Insider.
“What we see is there really haven’t been any major shifts in trend,” she said, pointing to how the most recent major trend was when skinny jeans made it onto the market, much like RBC.
“The trends kind of stayed the same, so a lot of these customers already have what they’re looking for in their closet, and it comes to, ‘OK, what am I going to spend on?'” Santaniello said. “Unless there’s a major new trend, it’s sort of fill in, and nobody’s really willing to spend the money on something that is just part of their … assortment.”
As a result, stores like Zara thrive; people can just fill in their wardrobes with affordable, stylish (and disposable) apparel, without having to invest too much of their hard earned cash on ephemeral trends.
This could be ameliorated if retailers were bold. But no major retailer is stepping up to fix this problem.
“No one’s really had the courage to actually put forth, ‘This is a trend,'” Santaniello said.
At the time, she pointed to bootcut jeans, which were having a comeback. Much like the recently revived flare jeans, they don’t require people to purchase new merchandise — they can just dig them up old items that they previously bought.
Quite simply, retailers aren’t giving consumers a need to go shopping — let alone a compelling reason to pay full price.
And some stores, such as Banana Republic and J. Crew, that have tried have gone too far from the middle, trying to be trendy but ultimately forgetting who their customers are and making them feel abandoned. As a result, they have struggled to bring up their sales. In its most recent quarter, Banana Republic saw comparable sales fall 9%.
Fortunately, there is some hope for retailers that want to dare to be bold.
One place that new trends can live could be online, retail expert Doug Stephens writes on his blog, The Retail Prophet, and online shopping is already contributing to the decline of malls. But the reason that online retailers can do this, Stephens writes, is that “they don’t have to stock a thousand of something if they only sell ten of them.” (Just consider how the floors of Macy’s have to resort to lots of sales to bring people in and clear out inventory.)
“They can still carry the item, without tying up massive amounts of capital and floor space,” he writes. “Consequently, online is where you’re likely to spot the next cool, new product. Not in a store.”
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