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The internet's big impact on physical retail space

"The death of the retail space" may be over exaggerating what's going on, but what is undeniable is the impact the internet has had on physical stores and the business models of traditional retailers. A couple of weeks ago, we wrote about the changes in internet domain names and what they mean for businesses. Now we look at it in a slightly different way: how the internet has forever changed the way businesses conduct themselves.

For a moment, think about how your neighborhood and the surrounding area has changed in the last 10 or 15 years. Think about the changes you see at malls and shopping centers. Think about the increasing amount of time you spend shopping online. You'll probably notice that many stores have closed down -- not all of them, of course, but quite a few. You'll also probably notice some vacant storefronts in malls.

And last but not least, you'll probably also notice a surprising amount of your internet time is devoted to Amazon or other online retailers -- which makes the moves that companies like Sears, Staples and RadioShack are taking should not be that shocking.

Sears is closing its flagship store in Chicago, a move in line with the 300 stores they have closed since 2010. Staples will close 225 stores by the end of the year, as the company already generates roughly half of its sales online. Finally, there's RadioShack, which will close 20 percent of its stores -- 1,100 locations -- and refurbish the rest so that they have a "modern look" to them.

It is clear that the internet has forever changed the world of business, and entrepreneurs need to consider this effect when they take their first steps into business.

Source: Funnel Cast, "A Rough Time For Retail," March 20, 2014

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