Local Businesses Are Struggling
Updated: Sep 5, 2020
Chart Source Data: https://www.iab.com/insights/brand-disruption-study-2020-direct-brands-go-mainstream/
In 2019, U.S. brick & mortar store closings were up 68% YOY to a record 9,300 stores.
In 2020, the store closures numbers are on track to reach 20,000 – 25,000 stores. According to a June 2020 report from Coresight Research, a retail research firm, U.S. retailers are on track to close between 20,000 and 25,000 stores this year, about 60% of them in malls. That’s up from the firm’s previous estimate in mid-March of 15,000 closings, and it would surpass the record 9,300 stores closures last year.
Legacy solutions like websites and traditional mobile apps were ineffective at preventing US stores from closings pre-pandemic and the data clearly shows it's getting worse post-pandemic.
Physical brands (both large and small) that are ineffective at connecting with customers over short distances run the risk of losing market share or, worse, closing.
Local businesses were closing physical stores at an accelerated rate BEFORE the COVID-19 global lockdown.
Before the COVID-19 global pandemic, physical stores were closing at an accelerated pace. As such, it's scary to think about what the numbers might look like post-pandemic.
While there are a number of factors that can explain this trend, we believe one of the primary factors has been the inability of local businesses to reach their customers effectively and inexpensively.
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