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According to CVS, 900 of its locations will close in the next three years

Payam Javan: One major pharmacy chain is closing one out of every ten locations to make major adjustments as retail shifts. Other retailers are grappling with how to adapt to a shifting retail landscape too.

According to CVS, 900 of its locations will close in the next three years. They claim that by eliminating 10% of their locations, they are transitioning to a more online digital strategy and moving away from only delivering prescriptions and sundries to providing more direct health care personnel to customers in their stores.

Professor Kirthi Kalyanam, director of Santa Clara University’s Retail Management Institute said “Many of the current locations may not be particularly helpful or be the right kind of locations for that new kind of service,” he also stated some retailers risk becoming irrelevant

Many of these retailers have been a little too slow to close stores and refurbish the stores. They’ve been dragging their feet on it,” He noted.

For example, the last Kmart in California, in Grass Valley, will close on December 19, leaving only 21 stores countrywide. DSW announced the closure of its four-story Union Square location, as well as 64 other locations, on November 9.

Macy’s, on the other hand, indicated that it will close 10 shops in January but will postpone the closure of 60 others since it has discovered that online sales are greater in the locations where it has stores.

“Often for these retailers, e-commerce is a less profitable business than the store business,” Kalyanam noted, “Your advertising expenses can double if you shut down your physical store because that billboard effect is so strong.” Noting how closing doors also eliminates a store’s massive influence as a free-living billboard.

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We probably have much too many places to shop because the number of brick-and-mortar malls, strip malls, and outlet malls in the United States increased from 90,000 in 2000 to 115,000 in 2020. That’s why UBS predicts that if online shopping expands from 18 percent of retail sales now to 27 percent in five years, 80,000 retail stores will close, with others opening in their place.

Consumer behavior is moving faster than retailers’ ability to respond to that consumer behavior,” said Professor Kalyanam.

Even Amazon opened storefronts for that billboard effect.

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