Social media killed the retail store: How millennials have changed our shopping habits

"Dress for success" doesn’t exist anymore, say consumer experts. “You’re not building wardrobes today. You’re building memories.”
Holiday Shoppers Look For Bargains On Black Friday
Shoppers in New York. Millennials these days spend more on entertainment and experiences, such as dining and travel, than on products, one analyst said.Eduardo Munoz Alvarez / Getty Images file

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By Martha C. White

Dressbarn parent Ascena Retail Group said Monday it would put the troubled brand out of business, with plans to shutter its roughly 650 stores — but it's by far not the only casualty this year. Brands including Charlotte Russe and Payless ShoeSource have also shuttered stores, and even mall mainstays like Victoria’s Secret and the Gap have pulled back.

“Dressbarn is an example of a retailer that had too many locations. Also, their stores were poorly located in lower-tier shopping centers where traffic and spending has declined severely,” said Lizabeth Dunn, founder and chief executive officer of retail consulting firm Pro4ma. “Ascena failed to invest in the brand and when they made efforts to evolve in the last few years, it was too late.”

Retail analysts say these brands have many of the same challenges facing department stores today. On Tuesday, Kohl’s and JCPenney reported first-quarter earnings that disappointed investors.

Amazon is the elephant in the room. “Amazon certainly spurred a newfound way to shop, essentially, which is easier for consumers,” said Steve Marotta, managing director of equity research at CL King & Associates. “They need to make fewer trips to the stores and, in doing so, has made it very difficult for secondary and tertiary retail brands to prosper.”

“Amazon has changed how you sell,” said Marshal Cohen, chief retail analyst at market research firm The NPD Group. The combination of fast and free delivery, giving third parties a platform to reach consumers directly and building their own stable of brands have created a formidable challenge.

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“We certainly know the rules of engagement have changed,” Cohen said. "When you have the same number of retailers competing in a mall space and now add in the internet, it’s retail collision.”

But Amazon isn’t the only culprit. Americans have different priorities when it comes to their discretionary income. The millennial-driven shopping public today is predisposed to spend more on entertainment and experiences, such as dining and travel, than on products, Cohen said.

“It really comes down to a shift in spending more than necessarily that consumers aren’t spending at all,” he said. “Now entertainment has become a big part of the spending power consumers have. Fashion apparel becomes less of a priority,” he said. “We’ve got more than what we need.”

The influence of minimalism, best illustrated by the runaway popularity of Marie Kondo and her message of eliminating clutter, plays a role, as does the persistent trend of activewear and athleisure apparel. “‘Dress for success’ doesn’t exist anymore,” Cohen said. “You’re not building wardrobes today. You’re building memories.”

The popularity of sites like Rent the Runway offer another window into how Americans, especially young people, view fashion as something to be experienced rather than stockpiled. Urban Outfitters also announced this week that it is launching a clothing rental service that allows shoppers to borrow up to six items a month for $88.

“First it was disposable fashion, and now it’s really rentable,” Marotta said. “Owning stuff and having stuff isn’t really a priority of a younger demographic.”

The zeitgeist has pivoted away from traditional fashion to the extent that many apparel brands that are thriving are doing so on the strength of their social media platforms, engaging directly with users and selling products couched in the imagery and verbiage of experiences.

“The influence in fashion has clearly changed to social media’s ability to be able to share,” Cohen said, with people gravitating toward friends or self-styled influencers rather than the traditional gatekeepers of fashion like designers or department stores.

“We’ve now entered a space and time where the influence on fashion is coming from places that traditional retail has to adjust to,” he said. “That circle of influence has gotten very different.”