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I keep hearing about retail stores and malls closing left and right. I know that our own mall lost some of its big stores like JC Penny.
Is retail dying out fully or just shrinking? (i.e. it will stabilize later though many will close down in the meantime).
It will not die out fully. The old box stores with no imagination will be gone like Sears, KMart, JC Penny's etc.
The one's that will survive will need to make shopping fun. You need to how to figure out a hook to get people want to come to stores vs. the internet. Do I have the answer? No, but why go to store and shop if you have no incentive and can buy on Amazon. I know one thing when you look back in history, the companies that have done well had to figure out what turned people on to their product or business. There are lots of smart people out there and they will figure it out. But that being said, it will be a blood bath before we get to point of someone figuring it out. I would not buy retail stocks lol.
I agree with those who say that physical retail stores reached peak saturation while overall retail sales have more or less only increased with the increase in population as average incomes have stagnated, and internet retail is taking an increasingly larger share of only a slightly bigger pie, so traditional retail has to physically contract.
Yes, companies like FedEx and UPS are doing well. So are other segments of logistics management.
I too see that in high income and wealthy areas, traditional retail is holding its own, except for stores with poor management and marketing (e.g. JC Penny's, Sears, Sports Authority).
In average income areas, I believe that dollar stores are holding their own.
In short, fierce competition for an overall market that is barely growing at the pace of population growth as average incomes stagnate and technology makes newer forms of product and service distribution more efficient.
The world's largest bricks and mortar retailer is only half as big as the world's biggest online retailer. The biggest fish in the pond usually swallows or kills off the smaller fish.
One thing not mentioned in that article is that Amazon sells all over the world where WalMart doesn't. Yes, WalMart is in other countries, but not nearly the number that Amazon is in. Walmart also sells CHEAP merchandise. Whereas Amazon sells a massive variety of priced items. If you want a $200 pen, you can find one on Amazon, but you can't at WalMart.
I can buy anything from soap to crate engines on Amazon.
Eventually,the overpriced stores(Mostly clothing stores) will phase out or also go the online route.
Same with Lowes and other stores like so,their online inventory is about 200 times that of the retail portion.
Retail will still be good for items that are quickly needed(tools ,food , etc) but will probably keep the employee count lower on that end.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by ss20ts
One thing not mentioned in that article is that Amazon sells all over the world where WalMart doesn't. Yes, WalMart is in other countries, but not nearly the number that Amazon is in. Walmart also sells CHEAP merchandise. Whereas Amazon sells a massive variety of priced items. If you want a $200 pen, you can find one on Amazon, but you can't at WalMart.
Well, at least online you can. I have never looked for pens at Walmart, in fact rarely use them at home any more.
Call me crazy, but I think there will be a big return to retail in the next 10 years. Obviously, I'm just an average guy and could be obviously wrong, but I feel like the reputability of online shopping is dying out. Yes, it's cheaper, it's faster, it's more convenient, heck, you could even buy your groceries online now, but I think people are going to want a more tangible and personal experience again soon. Too many shady companies selling inferior or junk products behind the veil of faked positive reviews, beautiful photo-shopped pictures, and copyright that makes you think you're purchasing eternal youth or something. I probably make about 150-200 purchases online each year and over recent years the troubles I've had with online vendors or receiving defective or not as advertised products is consistently increasing. The time I spend dealing with the online vendors horrible customer service and trying to facilitate returns has grown to much of a hassle. Surprisingly, I'm now preferring the retail approach where I can see, feel, maybe even test the product before buying, and I've felt retail stores have become more customer centric than ever before. This is coming from a guy that was obsessed with online shopping too and thought it was just about the best thing ever for the last 15 or so years. Now though, it's becoming too difficult to sort out the good stuff from the junk just sitting behind the computer.
Last edited by the_grimace; 05-16-2017 at 12:19 PM..
I had an interesting experience recently. I ordered some clothing from Land's End (owned by Sears) on-line. I needed to exchange one item. They said I could save $7 in shipping if I returned the item to the local Sears, so I decided to do that. I only live 10 minutes from one. I haven't been in there for years.
I went to the Land's End department and found myself rather surprised. The quality of the clothing was so much higher than it looked on-line, and a bit higher than it looks in their paper catalogs. I was really impressed with so many items that I know I would not have glanced twice at on-line. The fabrics were really high-quality, and the colors were vivid and bright.
I felt a bit sad while I was there, wondering if there will be a time when we no longer have any stores to shop in. I shop mostly on-line, but I know that when I do shop in stores, I appreciate it in a way I didn't in the past. It is a convenience to be able to just walk into a store and walk out with the item in hand, rather than waiting for it to be delivered, as well as being able to touch the items and see them with your actual eyes rather than just a two dimensional photo on a computer screen.
Specialty retail (including 'high-end' stores) and grocery will be relatively stable for the foreseeable future. Actually, I should have specified that most "specialty" retail will be stable. Specialty stores that have outlived their usefulness or have easily been replaced by Amazon, etc. (such as Radio Shack, bookstores, music and video game shops, etc.) are obviously becoming extinct. As well all know, department stores that don't differentiate themselves in some significant way (Sears, JCP) are headed for oblivion.
I work for PetSmart and I'm fortunate that we're actually growing. The ability to bring your pet in the store to shop with you is one of the driving factors. A lot of pet owners (excuse me, "pet parents") also come into the store for advice on how to best care for their pets, which they can't get online or at a grocery store. Our greatest area of opportunity is customer service. More specifically, interacting with customers and becoming their trusted "go-to" for all things pet. Corporate realizes this, but getting them to allot the additional labor hours necessary to provide it is going to be an uphill battle. =/
Retail is the place people still go to shop if they are looking for overpriced merchandise, limited selection, hassles with parking and waiting in line, etc.
Online shopping is so much better, I haven't been inside a retail store for anything other than looking at an item I plan to buy online later in years.
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