Where Will We Go?

Where Will We Go?

Brick-and-mortar retail stores are closing at an astonishing rate in the US. 9,300 retail locations are projected to close this year, and that number will grow. In case you're wondering, that’s a 50% increase in physical retail closures from the previous year. 

And many of the chains staying open are quickly transitioning to being off-price retailers to compete with online retail. (Keep a close eye on Macy's as they try to redefine themselves.)Exacerbating the issue is the sweeping trend of bankruptcies of household names like Sears, Forever 21, Payless, Barney's, and Charming Charlie's, just to namedrop a few who can't keep up with the fast trends, convenience, and choice of e-commerce. As we continue toward the convenience model of shopping, eating, and living, this trend will spin further out of control. Retail is in a full-blown war against home convenience delivery. And the warehouses are winning. 

As you may or may not expect, company headquarters are on the move as well. They're moving to more corporate tax-friendly states with better weather and a better business climate. California alone has lost over 1900 company headquarters like Toyota, Charles Schwab, and Jamba Juice. The big winner has been Texas, where the business climate is easier to navigate, labors costs are less, and housing is more affordable. Other states to benefit are Nevada, Arizona, Colorado, North Carolina, and Florida. Certainly not New York, California, or Illinois.

Which leads us to... Will the workplace become the next casualty? What I mean is, as retail moves to the web-powered warehouses, and the Internet continues to capture our dollars (and our loyalty), are we that far off from companies abandoning large offices and eliminating the need for many employees to actually go to a physical location for work? Are we heading toward a more independent workforce that works remotely more than ever before? Perhaps we just gather once a month, or when in-person meetings are absolutely necessary. Maybe we shift our office space rental dollars to a smaller building with less spent on ambiance, while cubicles are replaced by open, collaborative workspaces. And we'll rely even more heavily on video conferencing, Dropbox, and other collaborative digital tools.

More jobs than ever can be done remotely today, but we all know there will always be many that cannot. But keep an eye on how companies get creative to offset costs and increase productivity, especially direct-to-consumer companies who are suffering from the hollowing out of the mighty physical retail store economy. 

This is a game of survival, and if companies are fleeing states for less complicated business locations, then offices as we know them will someday start to close, and you know what? That may not be so bad.