By Jamie Cheng
If getting sales is the lifeblood of every business, Forever 21 needs more than just one blood bag donated to them. Sadly, even if they had a donor, it would be too late for them.
To most consumers, we wouldn’t think that this booming, teenage-dream retail store would be started by a married South Korean couple who moved to Los Angeles in pursuit of The American Dream.
Even without having the command of English at the back of their heads, Mr. Chang Do Won and Mrs. Chang Jin Sook still found great success as entrepreneurs.
Unfortunately, things headed south when they couldn’t adapt to the sudden change in consumer buying behaviour. It was a long drop for the Changs – an estimated combined net worth of $6.1 billion to declaring Chapter 11 bankruptcy in a blink of an eye.
The Sweet Memories
Forever 21 was initially called Fashion 21. The co-founding couple had launches three other business ventures but those didn’t work out well. Fourth time’s the charm for the Changs and that when Fashion 21 was born.
They amounted to $700,000 in sales for their first year which is an incredible feat for any start-up with a humble 900-square-foot store.
This eventually led to them deciding to rename their business as Forever 21, and scale by opening a store every six months. Just imagine the amount of work they put in to do that!
Forever 21 is not alone
This might seem like big news – and it is – but it doesn’t this seem all too familiar?
The chart below might help rig your memory.
All the companies in red have declared bankruptcy over the years. All this happened while Amazon, the eCommerce giant rose up faster than any of the companies that were the biggest at that time.
The Shift in Consumer’s Buying Behaviour
Not only have buyers become smarter (and more cautious), where they shop and make payment has changed drastically as well.
Yup, you guessed it – it’s the rise of eCommerce shopping experiences.
Statistics show that 76% of people shop online. Out of this number, 25% of them do so at least once a month, and 16% make online purchase at least once a week.
It is inevitable that eCommerce will be taking over the scene. As for those who cannot adapt to the rapid changes (as compared to the duration they took to build their business), they might just end up like Forever 21.
Based on this graph by Statista, an exponential increase in eCommerce revenue is observed. They also noted, “in 2019, retail eCommerce sales worldwide amounted to 3.53 trillion US dollars and e-retail revenues are projected to grow to 6.54 trillion US dollars in 2022.”
The eCommerce overhaul is not a matter of “yes or no” anymore but of “now or tomorrow”.
How Can Business Owners Adapt Quick Enough?
If you’re running a small to medium enterprise, it is easier for you to make changes as compared to the bigger corporations. Budget might be an issue for you – it would be a serious issue if you wanted to create an eCommerce website ten years ago.
Lucky for you, there are eCommerce platforms available right now that make setting up a professional and functional online store easy and affordable.