The ecosystem of Retail is probably changing faster than we can think! Forever21 bankruptcy is the latest proof of the same. Retail is experiencing irreversible changes and would quickly need to mold itself as per the needs and behavior of the customers.
Everything seems to be going well for forever21 in year 2016 with a revenue of 4 Billion ++, 32k+ employees, and more than 600 locations. Their website also contributed 16% of the revenue. In September 2019, the company filed for bankruptcy protection and closed operations in 40 countries. It closed most of its international stores and 178 US outlets. It will continue to operate some stores and their website. So what went wrong?
It will be easy to say that Amazon happens to them. For sure, Amazon.com is impacting retail in a bigger way than ever before, but that may not be the only reason. With decreasing footfalls in malls, customers visiting malls, but purchasing online, changing trends, and pricing are some of the factors that took forever21 down.
The brick and mortar stores need to quickly transform themselves and adopt online in a much broader way. Technologies like personalization, AI, machine learning, Augmented Reality are lifesavers if adopted properly. We see so many retailers struggling to get the basic ecommerce right and restricted themselves to the shopping cart-related work only. Technology adaptation inside the retail stores also hasn’t shifted fundamentally.
eCommerce Next team has reached out to forever21 for their comments