In 2020, Retailers Need to Run Lean and Mean

Last year, retail store closures surpassed the 9,000 mark—surpassing 2018 by nearly 60%. The fact is that retailers ARE opening new locations, but the closings are outpacing openings at a rate of 2 to 1, and the industry will continue to face an uphill battle of challenges ranging from large-scale closures to stock risk for years to come. Experts believe the brick-and-mortar retail industry is oversaturated and the way to stay afloat is to trim down costs by reducing the number of physical store locations. 

According to Credit Suisse’s recent report, there are more than 23 square feet of retail space for every man, woman, and child in the U.S. Compared to other developed countries’ per capita like Canada (16 square feet), Germany (4 to 5 square feet), and France (4 square feet), it’s evident that there is indeed an issue of excess in the American retail industry. Additionally, as eCommerce continues to skyrocket, foot traffic is on the decline.

So, the question becomes—how many stores is too many? And what is the number that’s “just right?” Unfortunately, there’s no one-size-fits-all answer for the retail industry. The number is highly dependent on individualized factors, but the goal, according to Nick Egelanian, president of SiteWorks, is “to have the optimal number of stores that maximizes the performance of each store—the net cost to build the store, the net cost to operate the store, the net cost of the goods in the store—for a certain threshold return on investment.”

Bottom line: A smart strategy is to have fewer locations that provide real value and experiences to customers that they won’t find online. And in order to operate a successful “lean and mean” operation, U.S. retailers looking to downsize this year—and for the future—need a channel where they can quickly offload excess, returned and other liquidation merchandise into the secondary market. With a scalable platform like the one B-Stock offers, retailers can do exactly that—maximize recovery and velocity by selling their leftover stock and apparel to a community of vetted business buyers from around the world. This is why nine of the top 10 U.S. retailers use our auction-style B2B marketplace to drive competition and increase the market value of their overstock, helping to create financial stability as they navigate continued shifts in consumer behavior and spending. 

Download our case study and learn how we helped a leading retailer: 

1. Consolidate three returns warehouses to one 
2. Reduce inventory cycle from 40 days to 17 and 
3. Bring on 8,000+ new liquidation buyers

If you’re interested in a customized solution for your returned, overstock, or excess inventory, contact us. And check out our Marketplaces page to learn more about the clients we serve.