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Should we listen to conventional wisdom?
Merriam-Webster has been in the business of telling us what words and phrases mean since 1826. If you look up the term conventional wisdom, Merriam-Webster tells us that it's "the generally accepted belief, opinion, judgment, or prediction about a particular matter."
But is it correct? Experience shows that conventional wisdom is often right, but not always. Sometimes it's dead wrong. In the 15th century, conventional wisdom held that the world was flat. In 1962, an executive from Decca Records turned down a chance to sign The Beatles to a recording contract, noting that "We believe guitar groups are on their way out."
And now, in 2019, we're starting to entertain doubts about another bit of conventional wisdom: that traditional retail is dead, or at least dying.
We all know that the way Americans shop has changed in the last decade. We've read about the meteoric rise of Amazon.com and the explosion of e-commerce. We've also read about the "retail apocalypse," the store closures, the retail bankruptcies, and the vacant malls that purportedly signal the death of retail as we know it.
But that narrative overlooks a few things. While it's true that U.S. retail stores closed at a record pace in 2017, it's also true that the pace slowed considerably in 2018. That's led analysts to suggest that perhaps 2017 wasn't so much the beginning of the end as the bottom of the brick-and-mortar retail trough. Going forward, they foresee a kind of Darwinian scenario playing out, in which weaker-performing stores and chains die off and the "fittest" players—those that are able to adapt to a changing world—survive and thrive.
It's already happening. Mindful of the fate that awaits those who fail to stay relevant, many retailers have adjusted their business models to reflect changing consumer preferences and expectations, revamping their stores and investing in innovative services. Those efforts are paying off. Retailers that have adapted to changing tastes—like Target, Nordstrom, and Walmart—continue to show strong (and growing) sales.
And that's not the only encouraging sign for brick-and-mortar stores. A recent study conducted on behalf of the International Council of Shopping Centers (ICSC) indicated that we've seriously misread the demographic trend lines and that the outlook for stores may be better than expected. We've long been told that a big part of brick-and-mortar's problem has been the stores' failure to attract younger buyers (who prefer to shop online), but the study showed it isn't quite that simple. Although that may be true of millennials (those between the ages of 23 and 38), it's not the case with the generation coming up behind them: Gen Z, or the cohort of children, teens, and young adults between the ages of seven and 22. The study showed conclusively—and unexpectedly—that Gen Zers overwhelmingly prefer in-store over online shopping.
Perhaps the most interesting finding of all was the sharp break between Gen Zers and millennials with respect to shopping preferences. Millennials have famously shunned malls, and it has long been assumed Gen Zers would follow in their footsteps. This study shatters those assumptions. As is often the case, these kids just don't give a damn about the conventional wisdom.
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