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The problem is that retail employees don't add enough value. Furthermore, in many states, minimum wages are going up. That makes the business model for retailing even worse. When the retail management reacts by eliminating personnel, it makes shopping even more inconvenient. Trying to just find a person at checkout becomes a problem.
What's happening now by Amazon.com to the the brick and mortar retailers is very similar to what Wal-Mart did to small town retailers two decades ago. Develop a new business mode that is more efficient.
Those laid off workers will need to develop skills in other areas. But that has been the story of employment since the very beginning of the Industrial Revolution.
Who has time for retail stores? If you work full time and have kids...you can order stuff at amazon during lunch hour (or, lets be real, while you're on the clock).
The problem is that retail employees don't add enough value. Furthermore, in many states, minimum wages are going up. That makes the business model for retailing even worse. When the retail management reacts by eliminating personnel, it makes shopping even more inconvenient. Trying to just find a person at checkout becomes a problem.
You are contradicting yourself there. Either an employee is necessary or not. Your first statement says that employees don't add value, your last statement says that without them shopping is inconvenient and problematic. You can't have it both ways.
Quote:
What's happening now by Amazon.com to the the brick and mortar retailers is very similar to what Wal-Mart did to small town retailers two decades ago. Develop a new business mode that is more efficient.
True, but it isn't all about employee wages. Warehouse real estate is much cheaper than retail space. Less expensive fixtures, less parking, no need for signage, interior finishes can be largely eliminated.
I order some things online. Mostly antiques and collectables.
Also, it is good for gifts. However while I do order some clothes for myself online, i can not gauge the fit and quality until I have touched it and tried it on.
I happen to enjoy the experience of shopping.
Shopping can be a social event. As a teen, I loved shopping with friends. My own kids went to the mall as a social activity. I still enjoy shopping with others. Ordering online is fine if you know exactly what you are looking for, but it's a solitary experience. You can't show a picture and ask, "does this make me look fat?"
I hate returning things that I ordered online. I end up keeping stuff that I am not 100 percent satisfied with in order to avoid spending even more money (sometimes) on packing materials, postage, and a trip to UPS or USPS, Fedex and I don't want to wait around until someone shows up for a "pick-up." I don't want to order something in multiple sizes and colors. This is especially problematic with shoes. I do order stuff online, but sometimes it's actually cheaper and faster to go to the store and if you like the item, you can start using it that very same day.
Retail will shrink, but I don't think they will disappear completely, like vinyl records.
The head of Macy's was interviewed when they announced the store closures a while back. He said something that is very telling. He said France has 1.4 square feet of retail space per person and Germany has 1.3. In America we have 7.5. We are over retailed. In an era where people are prepared to spend on experiences, and not stuff, it's too much retail space. Now granted Macy has other issues...but I think he is right. There are stores that I do not go to, and I don't understand how they stay in business. Bed bath beyond for instance. I can always find what I need cheaper other places.
Now I'm not talking about stores that don't appeal to me, that I am not their target market. I'm talking about stores that should be in my wheelhouse, but I find amazingly lacking, like...Macy's. I wouldn't mind spending a lot of money on a shirt, but it has to be a quality shirt. We received a gift card to Macy's a few years back, and I went in one day to look at shirts and I had the clerk in stitches over my quality rant. And she agreed with me.
I ended up spending the card on socks and dishes.
This is the nail on the head here. There are 6 Macy's here in town and they arent even closing any here.
I think there will always be a need for brick and mortar locations but certainly not at the level there once was.
It reminds me of the decline of the malls. During its heyday we had no less than 7 malls here. Ultimately they started to die off and the few that are left are doing fine because there will always be a need for "some"
Amazon. It really isn't much fun going out in traffic and parking and running through stores looking for stuff in the day and age of online shopping.
Also, there is always an excess of retail - because you must understand our system makes no sense. That is, 5 big box stores will open in an area where maybe 1 or 2 is needed. All the local businesses will close and then a couple of the big boxes will do...or they will be replaced by a newer bigger box...leaving millions of square feet of empty space.
Sometime we may be able to make national parks out of the concrete jungles we have created which are not needed. I hope so.
But what happens to all these employees who get laid off? If retail is on a downward spiral where are they to go? Sure some can get into other fields or maybe they have some sort of a cushion to fall back on while they go for continuing education but most people are in retail aren't doing it for the love of the job. It's usually a minimum wage type job in most cases.
I'm afraid all these lay-offs are going to cause another recession when we have barely recuperated from the last one.
There are many other industries that are dealing with labor shortages, particularly for skilled positions, and positions requiring education. Many manufacturing firms have been dealing with these issues for years. Maybe some of those workers can graduate from peddling products, to producing products. The profit margins are better in manufacturing as well.
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