More people have turned to online sales for their shopping needs, but brick-and-mortar stores will remain an important part of retail with needed changes, analysts said just a week after two major retailers announced local store closures.

Kohl’s and Macy’s announced last week they are closing underperforming stores at nearly 100 locations nationally. Kohl’s is closing 27 stores across more than a dozen states, including Ohio. And Macy’s is closing 66 locations, including the site at the Mall at Fairfield Commons in Beavercreek.

“To me, it’s a difficult situation because we continue to see retail places go out of business, which is a blight on our community,” said Peter Courlas, a patron at the Fairfield Commons mall last week.

Stubborn challenges face brick-and-mortar retail outlets, according to Kirthi Kalyanam, a professor and executive director of the Retail Management Institute at the Leavey School of Business, Santa Clara University.

Kalyanam is not certain he sees a solution for that format.

“I don’t see a compelling formula yet for a brick-and-mortar reinvention in the age of e-commerce, of the traditional department store format,” he said.

Macy’s and traditional department stores in general are under pressure due to the growth of the Internet and e-commerce, Kalyanam said.

Many of the brands sold in traditional brick-and-mortar stores are available online. He cited the example of Hugo Boss, a brand available at Macy’s but also at Neiman Marcus — and on both of those retailers’ web sites.

Indeed, these products are also available directly on the brand’s own site, at HugoBoss.com, as well as the brand’s own first-party retail stores.

“Because of the availability of these brands online, the need to go to the closed air-conditioned mall has reduced,” Kalyanam said. “These malls are seeing a reduction in traffic and, hence, are under pressure.”

He contends as well that the retail model is “highly leveraged,” burdened by what he sees as high rent, high inventory, high labor, and in some cases, high debt.

“It does not take much of a sales drop for the store to become unprofitable,” he said.

As result, “B&M” retailers are pruning store fleets or trying to add new concepts, like Macy’s Blue Mercury stores.

The Greene Town Center in Beavercreek has fared slightly better than other area shopping destination, with a mixed bag of announcements last week, with both Taste of Belgium and LA Fitness (formerly Esporta) announcing closures, but retail outlets Anthropologie opening this week, and Arhaus opening later this spring.

A few Greene patrons said that while they weren’t surprised by the LA Fitness, they were optimistic about the Greene’s future offerings.

“(LA Fitness) just never seemed all that busy,” said Delanie Turner. “Taste of Belgium is maybe a bit more (surprising), because that one hasn’t been here as long...and that’s another one that’s kind of off to the side. I feel like things in the Greene, if they’re not relatively central, people don’t really think about them.”

Not so fast

However, Nick Egelanian, founder and president of Siteworks Retail, a Maryland-based consultant to retailers, developers and others, sees the arena very differently.

Most retailers achieve sales in stores, not online, he said. In fact, it’s not close.

He sought to make a distinction between the Macy’s and Kohl’s situations. “Macy’s” is a name that a lot of “emotional” and historical resonance, but that business has been going through a decade-plus decline and has been closing stores and losing volume, he said.

“Most of the stores in the Midwest, they will not save,” Egelanian said of Macy’s, adding later: “You’ve got a chain that’s broken.”

Kohl’s has its share of challenges, but he sees that announcement as more indicative of problems with particular stores, not necessarily problems with an entire chain.

“It’s not really a major business announcement. Chains close stores all the time and don’t make a business announcement,” he said, referring to Kohl’s.

He believes “brick and mortar” outlets are “extremely healthy,” making up 85% of American retail sales. He said online sales are growing, but he does not see e-commerce as the death knell of traditional storefronts.

Area people like stores

Area residents told this newspaper they value brick and mortar locations.

“We need brick and mortar stores. We can’t just order everything online. I do order online, but I also want to go to brick and mortar stores so I can see, feel, touch things, and so people can have jobs, so it’s a concern,” Courlas said.

The Greene in particular also has an advantage, Turner said, because there are other things to do, including live music and events like the Greene’s Christmas parade.

“There’s a lot more things to do where you can come here and not spend money, which makes it a little bit more of a third space than exclusively a mall,” she said.

In January 2020, Internet sales were 10.9% of retail sales, roughly matching what were once catalogue sales, he said.

“All the Internet is, is an electronic catalogue,” Egelanian said.

He acknowledged that eventually every brick-and-mortar chain does go out of business, but that’s a slow process that can take decades, and that business is often transferred to other stores, not the Internet.

“Despite all the stories of closures, retail sales don’t really go down ... Most of what people buy is what they eat and put on their bodies,” he said.

According to Capital One Shopping Research, U.S. brick-and-mortar retail sales in 2023 totaled $7.051 trillion, up 2.13% year-over-year. And yes, 85% of all U.S. retail sales dollars came from brick-and-mortar stores, Capital One said in November.