INDIANAPOLIS, Ind. — Shopping in person looks a lot different than it did a few months ago and the bankruptcy filings of large national retailers have begun to hit central Indiana.
Along a one mile stretch of 86th Street on the northwest side of Indianapolis, three retailers have filed for bankruptcy. A Pier One store began its going out of business sale just before Memorial Day. Nearby, a JC Penney store has yet to reopen as the company decides which of its stores to permanently shutter and a Tuesday Morning store was listed for closure in the company’s recent court filing.
“I’m not surprised at all by the bankruptcies and I think depending upon the duration of this (pandemic), we’ll see more,” said John Talbott, Director of Indiana University’s Center for Education and Retail.
Mohammad Rahman, associate professor at Purdue’s Krannert School of Management, agreed with Talbott, saying whether a retailer survives will depend on what the company looked like before the pandemic and how well it adapts to the abrupt change in consumer habits.
“What’s the convenience this retailer, (like) JC Penney, is creating for me? I think that’s the answer the retailers have to have, and if they don’t have that answer, they’re going to struggle,” Rahman said.
Convenience becomes even more important as consumers decide whether they’re comfortable shopping in person again. In 2013, Rahman co-authored an article that argued retailers needed to rethink their digital strategies and now that argument is playing out in real time.
“People have been pushed to try different digital channels that a lot of (them) have resisted or are not comfortable using or just never found it to be very useful for them,” Rahman said. “Once consumers get used to some … conveniences, they like it.”
Store closures could reshape communities like the northwest side, though, as empty storefronts increase. In the shopping center housing Tuesday Morning, a restaurant permanently shut down at the beginning of the stay at home order, right next to a former Dressbarn, which closed after the company filed bankruptcy in late 2019.
“Each of the stores in some ways depends on the other stores in that area to attract and create sort of a center of gravity for shopping, that’s why it’s called a shopping center,” Talbott said.
Talbott believes the pandemic will accelerate physical changes in areas that were already struggling to retain retail, but argued that many companies have already begun adapting and taking steps to stay open in the long run.
“Though this is a difficult time, whenever you have challenges like this, usually what happens is innovation occurs and I think coming out the other side of this we’re going to have stronger and better retailers,” Talbott said.