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Retail Apocalypse: Everything You Need to Know

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Retail Apocalypse: Everything You Need to Know

Chart: Retail Apocalypse 2017

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The steady rise of online retail sales should have surprised no one.

Back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each and every year since then, even through the Great Recession. By 2009, e-commerce made up about 4.0% of total retail sales, and today the latest number we have is 8.3%.

E-commerce vs. total retail sales

Here’s another knowledge bomb: it’s going to keep growing for the foreseeable future. Huge surprise, right?

Signs of a Reckoning

Retailers eye their competition relentlessly, and the sector also has notoriously thin margins.

The big retailers must have seen the “retail apocalypse” coming. The question is: what did they do about it?

Well, companies like Sears failed the shift to digital altogether – in fact, it is even widely speculated that the former behemoth might file for bankruptcy later this year.

The majority of other companies, on the other hand, are trying to combine “clicks and bricks” into a cohesive strategy. This sounds good in theory, but for established and sprawling brick and mortar retailers with excessive overhead costs, such tactics may not be enough to ward off this powerful secular trend. Target, for example, has had impressive growth in online sales, but they still only make up just 5% of total sales. As a result, the company’s robustness is also in doubt.

Wal-Mart took another route, which could potentially be the smartest one. The company hedged their bets by buying Jet.com, which was one of the fastest growing online retailers at the time. Later, they followed up by buying an online shoe retailer to help fill a perceived gap in footwear. Recent reports have surfaced, saying that these acquisitions are leading to staff shakeups, as the company re-orients its focus.

After all, going online is not just a tactic to boost sales in the new era of retailing. It has to be a mindset, and one that is central to the company’s strategy. Hopefully Wal-mart gets that, otherwise they will also be in trouble as well.

Apocalypse Now

In the midst of all of this is what is described as the “retail apocalypse”.

There are two main metrics that are pretty black and white:

Number of Bankruptcies: We’re not even one-third through 2017, and we already have about as many retail bankruptcies as the previous year’s total. If they continue at the current pace, we could see over 50 retailers bankrupt by the end of the year.

Number of Store Closings: So far we’ve seen roughly 3,000 store closings announced in 2017, and Credit Suisse estimates that could hit 8,600 by the end of the year. That would easily surpass 2008’s total, which was 6,200 closings, to be the worst year in recent memory.

Here’s some of the companies that have already filed for bankruptcy:

  • Gordmans Stores
  • Gander Mountain
  • Radioshack (again)
  • HHGregg
  • BCBG Max Azria
  • Eastern Outfitters
  • Wet Seal
  • The Limited
  • Vanity Shop of Grand Forks
  • Payless Inc.
  • MC Sports

And here are the store closings occurring as a result of the retail apocalypse:

Retail Closings

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Chart of the Week

The Future of 5G: Comparing 3 Generations of Wireless Technology

See how 5G compares to older iterations of wireless technology, and why it’s poised to change the way the modern world uses data.

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The Future of 5G: Comparing 3 Generations of Wireless Technology

Wireless technology has evolved rapidly since the turn of the century. From voice-only 2G capabilities and internet-enabled 3G, today’s ecosystem of wireless activity is founded on the reliable connection of 4G.

Fifth-generation wireless network technology, better known as 5G, is now being rolled out in major cities worldwide. By 2024, an estimated 1.5 billion mobile users─which account for 40% of current global activity─will be using 5G wireless networks.

Today’s chart highlights three generations of wireless technology in the 21st century, and the differences between 3G, 4G, and 5G networks.

5G: The Next Great Thing?

With over 5 billion mobile users worldwide, our world is growing more connected than ever.

Data from GSMA Intelligence shows how rapidly global traffic could grow across different networks:

  • 2018: 43% of mobile users on 4G
  • 2025: 59% of mobile users on 4G, 15% of mobile users on 5G

But as with any new innovation, consumers should expect both positives and negatives as the technology matures.

Benefits

  • IoT Connectivity
    5G networks will significantly optimize communication between the Internet of Things (IoT) devices to make our lives more convenient.

  • Low latency
    Also known as lag, latency is the time it takes for data to be transferred over networks. Users may see latency rates drop as low as one millisecond.
  • High speeds
    Real-time streaming may soon be a reality through 5G networks. Downloading a two-hour movie takes a whopping 26 hours over 3G networks and roughly six minutes on 4G networks─however, it’ll only take 3.6 seconds over 5G.

Drawbacks

  • Distance from nodes
    Walls, trees, and even rain can significantly block 5G wireless signals.
  • Requires many nodes
    Many 5G nodes will need to be installed to offer the same level of coverage found on 4G.
  • Restricted to 5G-enabled devices
    Users can’t simply upgrade their software. Instead, they will need a 5G-enabled device to access the network.

Global 5G Networks

5G still has a way to go before it reaches mainstream adoption. Meanwhile, countries and cities are racing to install the infrastructure needed for the next wave of innovation to hit.

Since late 2018, over 25 countries have deployed 5G wireless networks. Notable achievements include South Korea, which became the first country globally to launch 5G wireless technology in April 2019. Switzerland boasts the highest number of 5G network deployments, currently at 225 and counting.

To date, China has built roughly 350,000 5G sites─compared to the less than 20,000 in the U.S.─and plans to invest an additional US$400 billion in infrastructure by 2023. Chinese mobile providers plan to launch 5G services starting in 2020.

What Does This Mean For 4G?

4G isn’t going anywhere anytime soon. As 5G gradually rolls out, 4G and 5G networks will need to work together to support the wave of IoT devices entering the market. This network piggybacking also has the potential to expand global access to the internet in the future.

The race to dominate the wireless waves is even pushing companies like China’s Huawei to explore 6G wireless innovation─before they’ve even launched their 5G networks.

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Chart of the Week

Which Countries Have the Most Wealth Per Capita?

How do the rankings of the world’s most affluent countries change when using different metrics to measure wealth per capita?

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Which Countries Have the Most Wealth Per Capita?

Our animated chart this week uses data from the ninth Credit Suisse Global Wealth report, which ranks countries by average wealth, calculated as gross assets per adult citizen.

While using such a metric certainly gives a quick snapshot of wealth per capita, it doesn’t necessarily show the complete picture.

Some argue, for example, that calculating the mean doesn’t factor in the gap between the richest and poorest in a population—also known as wealth inequality. For this reason, we’ve compared this number to median wealth for each country, providing a separate angle on which countries really have the most wealth per capita.

Mean or Median: Which Makes More Sense?

Below, we’ve visualized a hypothetical example of two groups of people, each earning various sums of money, to show how average (mean) and median calculations make a difference.

Mean vs Median Comparison

What can we observe in both datasets?

  • Total wealth: $2,000
  • Total people: 15 people
  • Average wealth: $2,000 ÷ 15 = $133

However, that’s where the similarities end. In the first group, wealth is distributed more evenly, with the disparity between the lowest-paid and highest-paid being $300. The median wealth for this group reaches $100, which is close to the average value. In the second group, this gap climbs to $495, and the median wealth drops sharply to only $30.

Scaling up this example to the true wealth of nations, we can see how the median wealth provides a more accurate picture of the typical adult, especially in societies that are less equal.

Let’s see how this shakes out when ranking the world’s most affluent countries.

Ranking Top Contenders on Wealth per Capita

When it comes to wealth per capita, it’s clear that Australia and Switzerland lead the pack. In fact, the data shows that both nations top the lists for both mean and median wealth.

However, both nations also have the highest absolute household debt-to-GDP ratios in the world: in 2018, Switzerland’s levels reached nearly 129%, while Australia followed behind at 120%.

Here is a full ranking of the top 20 countries by mean and median wealth:

RankCountryMean wealth per adultCountryMedian wealth per adult
#1🇨🇭 Switzerland$530,244🇦🇺 Australia$191,453
#2🇦🇺 Australia$411,060🇨🇭 Switzerland$183,339
#3🇺🇸 United States$403,974🇧🇪 Belgium$163,429
#4🇧🇪 Belgium$313,045🇳🇱 Netherlands$114,935
#5🇳🇴 Norway$291,103🇫🇷 France$106,827
#6🇳🇿 New Zealand$289,798🇨🇦 Canada$106,342
#7🇨🇦 Canada$288,263🇯🇵 Japan$103,861
#8🇩🇰 Denmark$286,712🇳🇿 New Zealand$98,613
#9🇸🇬 Singapore$283,118🇬🇧 United Kingdom$97,169
#10🇫🇷 France$280,580🇸🇬 Singapore$91,656
#11🇬🇧 United Kingdom$279,048🇪🇸 Spain$87,188
#12🇳🇱 Netherlands$253,205🇳🇴 Norway$80,054
#13🇸🇪 Sweden$249,765🇮🇹 Italy$79,239
#14🇭🇰 Hong Kong$244,672🇹🇼 Taiwan$78,177
#15🇮🇪 Ireland$232,952🇮🇪 Ireland$72,473
#16🇦🇹 Austria$231,368🇦🇹 Austria$70,074
#17🇯🇵 Japan$227,235🇰🇷 South Korea$65,463
#18🇮🇹 Italy$217,727🇺🇸 United States$61,667
#19🇩🇪 Germany$214,893🇩🇰 Denmark$60,999
#20🇹🇼 Taiwan$212,375🇭🇰 Hong Kong$58,905

The United States boasts 41% of the world’s millionaires, but it’s clear that the fruits of labor are enjoyed by only a select group—average wealth ($403,974) is almost seven times higher than median wealth ($61,667). This growing inequality gap knocks the country down to 18th place for median wealth.

The Nordic countries of Norway and Denmark can be found in the top ten for average wealth, but they drop to 12th place ($80,054) and 19th place ($60,999) respectively for median wealth. Despite this difference, these countries also provide a strong safety net—including access to healthcare and education—to more vulnerable citizens.

Finally, wealth in Japan is fairly evenly distributed among its large middle class, which lands it in seventh place on the median wealth list at $103,861. One possible reason is that the pay gap ratio between Japanese CEOs and the average worker is much lower than other developed nations.

With reducing income inequality as a priority for many countries around the world, how might this list change in coming years?

Footnote: All data estimates are using mid-2018 values, and reflected in US$.

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