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Supply Chain Graphic of the Week: It's not Just eCommerce that's Causing Woes for Retailers


Consumers Growing Preference for Services over Things Likely having a Huge Impact

July 27, 2017
SCDigest Editorial Staff

Traditional brick and mortar retail is under pressure without question, with massive store closings (maybe some 8,000 in 2017), and most struggling on the top and bottom lines.

eCommerce generally and Amazon specifically are usually blamed for this state of affairs, and with good justififcation, as eCommerce sales in the US rise 14-16% quarter after quarter versus the prior year -  and Amazon's sales are increasing much fasfer than that.


But that isn't the only factor. Consumer buying habits are also changing dramatically.


Saturday afternoon at tha mall? Not happening so much any more. And that is clearly reflected in the chart below from Deloiite, based on data from the US Bureau of Labor Statistics, which shows consumers are spending a lot less of their income on goods and a lot more on "services."



That change - spending on goods down almost two percentage points over the past decade - must also be weighing heavily on brick and mortar retailers.


Will this trend turn the other way? Impossible to say, but the idea of "experience" trumping "things" seems like it will last a long while.


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