Online companies are the future of retail

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The future of post-pandemic retail sector in United Statess looks linked both with firms that sell products online to a large extent and with traditional chain stores in large stores.

For now, investors from Wall street are already placing their bets on specialist retailers in the electronic commerce and in stores that have established a trajectory with online sales.

This implies bad omens for chain stores such as Macy’s and Nordstrom, but good prospects for Walmart, Target and Amazon, according to analysts.

The most obvious reason is that department stores such as Target and Walmart are better coping with the pandemic situation, while department store chains that are regularly located inside shopping malls and do not sell basic products, such as Macy’s, they have been forced to close.

Simply because they are so large and sell a wide range of products — from food to clothing — large-space stores were considered essential businesses and allowed to remain open during the health emergency.

Even in these times of nervous physical proximity, customers are even likely to prefer those large stores with their wide spaces and wide aisles.

On the other hand, these stores have been building distribution networks and digital sales systems for years, making it easier for their customers to order products online and collect them all at a specific site in the store or to receive them at home.

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Most likely, most people will continue to shop online or smartphones, even after physical stores reopen. This will leave companies with both physical stores and online sales in a better position to take advantage of the economic recovery, according to an analysis by the firm Euler Hermes.

That trend could make it harder for department stores to focus on clothing and accessories after suffering a severe economic hit during the pandemic.

“Clothing and shoe stores in the United States are undergoing a seismic transformation that will sink weaker players and reverberate well into 2021,” Raya Sokolyanska, an analyst at Moody’s, said in a report.

The coronavirus pandemic this month bankrupt J.C. Penney he was already struggling. It was the fourth largest retailer to take that step since the pandemic occurred, along with Neiman Marcus, J.Crew, and Stage Stores. They were already struggling with competition with each other, as many of their shopping malls had less foot traffic. The competition they suffered from department stores and online retailers like Amazon added even more pressure to their results.

Meanwhile, many of the department stores now have less money to invest in new operations, including their digital and distribution capabilities.

“This will further increase the priority of investments in the digital sector, widening the gap between companies that have the means to invest and those that have limited financial resources,” according to Moody’s.

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