Jeff Streader, Founder & Managing Director, Go Global Retail Investment Platform
COVID has overwhelmed all retailers that had a heavy reliance on brick and mortar stores. In addition, brands that had a meaningful wholesale business selling into large format stores like Macy’s, Nordstrom’s, etc., have seen a material decline in revenue.
However, digitally native brands, like ModCloth, have been fortunate to weather the storm and increase revenue.
What will the new retail landscape look like in the coming year(s)? We believe it will no longer be 85% off-line (brick and mortar) and 15% online, as it was in the USA in 2019. But how far will it evolve? Complicating this answer is the imminent demise of the shopping mall - especially locations with large anchors such as JC Penney and Macy’s, whom are closing many of their stores. Countless shopping centers will not survive and scores of specialty stores in the B, C & D malls will eventually close.
The consumer will not shift entirely online, but we anticipate a major shift will occur in 2020-2021. In addition, we expect a resurgence in independent “Mom & Pop” specialty stores (i.e. downtown shopping/shopping as a community event). Combine this with an increase in online sales and the market will have a very different profile. This changing environment presents exciting opportunities for the Go Global Retail team – and companies that believe that the time to embrace change is now! Go Global is interested in: • Relevant brands - those that have a strong or growing unaided market awareness • Have a growing social media presence • Have untapped market opportunities for geo expansion • Have potential for adjacent product category expansion • Have the ability to streamline and optimize their product and supply chain operations A brand that has “lost its way” is not a negative – it’s an opportunity. Our belief is the vast majority of management in our industry are need (and have often been hesitant) to deploy a digital playbook with modern strategies built around big data. We believe Go Global can win where they are currently failing.
Brand valuations have dropped and are still dynamic. Strong brands are available, and opportunities abound. The world is changing – are you ready to change with it?