Brace up for a new era in retail, one marked by a shrinking number of brick-and-mortar shops and smaller stores. The trend is already emerging, with more traditional stores closing their doors. But retailers are not calling it quits just yet, especially that business losers are no longer the only ones shutting down stores.

Last month Sears announced it would shut down its flagship store in downtown Chicago in April. This is the most recent of approx. 300 store closures in the United States that Sears has made since 2010. Other US retail giants, such as J.C. Penney and Macy's have also revealed their plans to carry out multiple store closings. The second largest US discount retailer, Target has lately said that it will eliminate 475 jobs worldwide and not fill 700 empty positions. Experts expect the whole industry to undergo a multiyear period of shuttering stores and cutting square footage. Shoppers are likely to witness an average decrease in overall retail square footage of between one-third and one-half within the next five to ten years, as a growing popularity of e-commerce sends the number of mall visits plummeting and reduces the need to keep inventory stocked in-store.

Too many stores, too little space

That being said, January has always been a favourite month for retailers to announce store closings. The International Council of Shopping Centers revealed that 44 percent of annual store closings announced since 2010 had occurred in the first quarter. But this year's shutdowns may be indicative of a new trend, triggered by an increasing number of shoppers choosing Web over brick-and-mortar stores. At the same time, many experts are claim that 2014 retail store closings in USA are due to a large extent to the overgrowth of the American retail industry even before the financial crisis hit the country. A couple of figures to prove their point: in 2007, there were 1,122,703 retail establishments in the United States and a total of 14.2 billion square feet of retail space. In other words, there is approximately 46.6 square feet of retail space per capita in the U.S., as compared to two square feet per capita in India, 1.5 square feet per capita in Mexico, 23 square feet per capita in the United Kingdom, 13 square feet per capita in Canada, and 6.5 square feet per capita in Australia. Little wonder that some of US retail establishments are closing down in this oversaturated market.

American mall shows its freshened face

Once a regular feature of the American retail landscape, a shopping mall is now fighting for survival. Without a radical reinvention, shopping centres in the United States may sink into oblivion within 10 to 15 years. In order to successfully compete with the increasing presence of online retail, brick-and-mortar stores need to concentrate on delivering an experience that customers cannot find on the Web. According to industry experts, physical stores cannot only consider themselves to be in the retail industry, but have to embrace the hospitality industry as well. Retailers must focus on what has always been essential to customers, i.e. creating a unique and memorable experience. Here is an example of such innovative approach to shopping: placing a cupcake ATM machine in a shopping centre. Consumers can swipe their credit card at a machine and get a freshly baked cupcake at 2 a.m. What can better remind them of the delights of shopping in a physical store?

Webrooming beats showrooming

E-commerce has been successfully stealing customers from physical stores. That being said, shoppers still value the in-store experience. According to the Accenture survey, 21 percent of U.S. shoppers plan to increase in-store purchasing, more than double the 9 percent of adults who said the same the previous year. The survey produced significant findings which can be effectively used by physical stores. For instance, when asked what part of the overall shopping experience retailers need to improve, 40 percent of respondents mentioned the in-store shopping experience, with just 16 percent pointing to the online shopping experience. And there is webrooming, of course. This past holiday season, Best Buy marketed itself as the "showrooming" retailer, effectively inviting customers to come in, check out the goods and then order them online. The retailer hoped that shoppers would either change their minds and buy in-store on the spot or order from the retailer's own website. According to Accenture, "showrooming" is gradually falling out of fashion as "webrooming" becomes the new buzz word. The study revealed that 78 percent of U.S. shoppers have "webroomed" over the past 12 months, while 72 percent have "showroomed." Sooner or later, brick-and-mortar stores are bound to capitalize on a growing popularity of webrooming.

Sources: http://www.cnbc.com; http://retailindustry.about.com; http://www.contrarianprofits.com Photo: http://www.flickr.com/photos/imuttoo/