by Alan Godrey
It is no secret that retailers everywhere feel the sting of a supply chain continuously being squeezed and manipulated by outside influences. Luckily for businesses in the U.S., the industry’s overall outlook remains bright. Changes to shopping habits spurred on by the pandemic have left the retail sector leading the pack when it comes to creating new businesses, which is a solid testament to the industry’s health.
The State of the Retail Industry as of 2021
So, what exactly does the retail business look like, and why? If you look at the data, you will find some good news. Do not let the resurgence of the COVID-19 pandemic and global supply chain issues bring you down — the retail industry continues to show a healthy glow of success despite these drawbacks, based on new business filing statistics compiled in Swyft Filings’ 2021 Industry Report. The retail industry continues to excel with a Volume Rank of #1. This means that retail had the most significant volume of new business filings among all measured industries in 2021.
Retail held on to this top spot despite experiencing a slight drop in year-over-year growth. In 2021, the number of new business applications submitted for the industry dropped by two percent. Compare those numbers to 2020, when business applications soared by 108 percent, and it is clear to see why the industry has retained its number one spot.
Why Is the Retail Industry So Strong?
Despite the overall dip in its Growth Rank, believe it or not, part of retail strength comes from the consequences of the COVID-19 pandemic. According to the National Retail Federation, retail sales grew by over 14 percent in 2021, and the number of store openings was twice as high as that of store closings. The pandemic forced a majority of customers to transition to ordering online. Far from being a detriment, this helped retail businesses.
Retail Dive notes that the move to ecommerce means that shoppers now make 43 percent of their monthly retail purchases online, and 88 percent of retailers sell online to capture that market. This tells us that going digital is critical for the retail industry now more than ever. Fifty eight percent of retail revenue comes from online sales, per the referenced Retail Dive report. Many retailers already know the power of digital commerce, but it is now more evident than ever that it is an essential requirement for success.
We are seeing plenty of opportunities for entrepreneurs and small businesses entering the retail industry to succeed despite the setbacks. The local, independent retailers that can pivot to an online or hybrid commerce model are pushing the industry forward and allowing it to maintain its top spot in terms of the overall volume of new business filings by Swyft Filings. The retail sector can weather these turbulent times and continue coming out on top with the right mindset.
Alan Godfrey is the CEO of Swyft Filings, an online incorporation, compliance, and SMB services provider based in Houston, Texas. The company analyzed more than 63,000 new business applications filed in 2020 and 2021 to determine the year-over-year potential for new business growth and volume. You can read the complete analysis in the Swyft Filings 2021 State of Swyft Industry Report.