Dec 04, 2017
Digital changes may force business bankruptcy for some retailers
The digital age has caused many changes in how business is conducted, and businesses such as retailers often struggle to keep up. Experts suggest that this is one of the reasons for the closure and business bankruptcy of Sears Canada. Retailers across Ontario and North America can look to Sears' closure as a case study in the importance of online strategy.
With the information age, retailers like Sears shifted from competing solely with other brick and mortar stores to competing with online entities such as Amazon. Sears insiders confirm that it had trouble competing in the digital world, and earned a lower margin from online purchases because the competition made lower prices necessary. Without a strong online shopping brand, Sears encountered financial challenges which ended in business bankruptcy.
Brick and mortar competition, especially in populous areas like Southern Ontario, also grew stronger during this period. Retail stores began focusing on items like apparel, footware and housewares, as online shopping overtook the appliance and electronics markets. Specialty stores which positioned themselves as experts in specific types of products are difficult for department stores to compete with, though some continue to flourish by expanding into profitable new spaces like groceries or building a profitable online presence.
Sears stores in metropolitan areas like Toronto found it challenging to compete both online and offline. Other retailers in Ontario may be faced by similar challenges as the market continues to change. Those who are considering business bankruptcy should contact lawyer for information and advice relating to the legal steps needed.