Retail: Retail's Final Frontier?

Main Street Can Survive
We’re not suggesting that Fifth Avenue, Rodeo Drive and Main Steet U.S.A. will be boarded up or turned into retirement communities for former retail mavens and their consultants. But there is a glut of retail space, with more stores closing all the time.

We do believe that online marketing will become the predominant retail model, because it just makes sense. A large retail marketer we work with operates about 1,000 stores generating approximately $15 billion in revenue — $11.5 billion through its stores and $3.5 billion over the internet. We calculate that if it were forced to sell its internet volume through its fixed distribution system, the increase in cost for more stores would be roughly proportionate (i.e., about 30 percent). That’s a serious hit to the bottom line.