Wal-Mart announced last week that it will be closing 269 stores in the U.S. and internationally. About 10,000 jobs will be lost in the process.
According to its statement, Wal-Mart will focus on "growing the e-commerce business" in lieu of these closures.
Wal-Mart, the world's largest company by revenue, has been too slow in adapting to online shopping trends, reports the New York Times. Even though Wal-Mart has already made significant investments in its online presence, it simply has not been able to catch up with online-only retailers like Amazon.
Wal-Mart is not the only one shutting down its bricks-and-mortar superstores. Macy's also announced that it will be laying off 2,500 employees and closing down five stores, reported Time.
The problem is that traditional retail locations are weighed-down by the expensive overhead costs of employees and buildings, reports CNBC. Where traditional retailers have the advantage of a physical network for sales and distribution, online retailers have the edge when it comes to convenience and ease of purchase.
The front-runner in the online retail sphere is Amazon. According to Statista, Amazon's quarterly revenues have increased by over 300 percent since 2010, seeing third-quarter earnings of $25 billion in 2015.
Dave Wendland, vice president of Hamacher Resource Group, told Forbes that "variety, reliable/predictable delivery, fair prices, and constant reach toward their next ambitious goal” have all greatly contributed to Amazon's success.
Amazon is constantly cooking up game-changing innovations. In November, Amazon announced Amazon Prime Air, a new delivery service that would allow buyers to receive their purchases within 30 minutes. The service will use drones to deliver items from an Amazon distribution center to the customer's backyard. Small items only, though. No refrigerators just yet.
On Tuesday, Amazon announced its latest creation — the Dash Replenishment Service, which can replenish items just as customers are about to run out. For example, certain Brother printers are wired to alert Amazon when they are almost out of ink, reports Mashable. The same works for detergent in select GE and Whirlpool appliances.
Ironically, one of Amazon's latest projects does not appear to be innovative at all. In November, Amazon opened a bricks-and-mortar bookstore of its own in Seattle.
Far from being a retrogression, however, this store may redefine how physical retail is done.
According to Entreprenuer, Amazon is "leveraging online data for offline sales." This means that Amazon will arrange and stock its physical stores based on consumer patterns observed online.
“It’s data with heart,” Jennifer Cast, vice president of Amazon Books, told Forbes. “We’re taking the data we have and we’re creating physical places with it.”
Amazon's new bookstore is expected to be especially popular with millennials, says Forbes. While Amazon's sales of Kindle e-readers are declining, 79 percent of millennials reported reading a print copy of a book in 2014.Comment on this story
As Entrepreneur says, "Amazon knows that people still yearn for the shopping experience, the book right now, the bookseller’s recommendations, the thinking process that occurs in a bookstore."
Amazon's new bookstore allows shoppers to do just that in a data-optimized environment.