AFP, New York :
Iconic American stores Macy’s and Gap are facing tough questions about their future following dreary earnings announcements this week that highlighted the growing market share taken by online retailers.
Conventional retailer profits are falling as fewer shoppers head to malls in favor of click-and-buy options offered by Amazon and a trove of emerging online fashion vendors. The trend is all the more striking because retailers see good conditions in the economy for consumers, including strong employment levels.
“We’re frankly scratching our heads,” Macy’s chief financial officer Karen Hoguet, told an analyst conference call. “We see the same economic data you all see and it would point to a customer that would be spending more.”
Trading malls for smartphones – In the first four months of 2016, all online retail sales rose 8.1 percent over a year ago, compared with just 1.9 percent growth in clothing stores, according to the Commerce Department.
“We’re seeing a fundamental reorganization of retail from an automobile-centered model to a smartphone-centered model,” said Andy Dunn, chief executive of Bonobos, a nine-year old men’s apparel store that does most of its sales online.
“We’re seeing a tremendous shakeout as we see online grow and offline contract,” Dunn said.
Still, he added, “I don’t think we’re moving to an online-only world.”
In women’s apparel, rising online players include websites like Wanelo, which “curates” products from 550,000 vendors and doubles as a social network for shoppers.
There are speciality sites for plus-sized women, such as Eloquii, and for consumers focused on sustainable manufacturing, such as Reformation.
There are also fashion websites that combine editorial and selling functions, such as WhoWhatWear, part of the Clique Media Group, which boasts 12 million unique monthly visitors.
“People are now realizing they have more options,” said Chris Morran, deputy executive editor Consumerist.com. “I don’t see any of the (newer) companies replacing Gap, but I see them all chiseling way.”
Iconic American stores Macy’s and Gap are facing tough questions about their future following dreary earnings announcements this week that highlighted the growing market share taken by online retailers.
Conventional retailer profits are falling as fewer shoppers head to malls in favor of click-and-buy options offered by Amazon and a trove of emerging online fashion vendors. The trend is all the more striking because retailers see good conditions in the economy for consumers, including strong employment levels.
“We’re frankly scratching our heads,” Macy’s chief financial officer Karen Hoguet, told an analyst conference call. “We see the same economic data you all see and it would point to a customer that would be spending more.”
Trading malls for smartphones – In the first four months of 2016, all online retail sales rose 8.1 percent over a year ago, compared with just 1.9 percent growth in clothing stores, according to the Commerce Department.
“We’re seeing a fundamental reorganization of retail from an automobile-centered model to a smartphone-centered model,” said Andy Dunn, chief executive of Bonobos, a nine-year old men’s apparel store that does most of its sales online.
“We’re seeing a tremendous shakeout as we see online grow and offline contract,” Dunn said.
Still, he added, “I don’t think we’re moving to an online-only world.”
In women’s apparel, rising online players include websites like Wanelo, which “curates” products from 550,000 vendors and doubles as a social network for shoppers.
There are speciality sites for plus-sized women, such as Eloquii, and for consumers focused on sustainable manufacturing, such as Reformation.
There are also fashion websites that combine editorial and selling functions, such as WhoWhatWear, part of the Clique Media Group, which boasts 12 million unique monthly visitors.
“People are now realizing they have more options,” said Chris Morran, deputy executive editor Consumerist.com. “I don’t see any of the (newer) companies replacing Gap, but I see them all chiseling way.”
