August 08, 2019
Retail Is Not Dead
Share This Post
Several months ago the local NBC station had a story about retail being dead. Having spent much of my career in retail I thought about it and started to look at the retail landscape.
Interestingly, I found that retail is going along swimmingly. Now having just said that I know many will say look at the stores that closed and are in trouble all that is true but let's look closer.
When did this theory of retail dying really start? When the *marts started to build stores in smaller towns I would argue the trend took wings. these small towns had these little stores with Mr. and Mrs. Smith and their children running a store where you could buy clothes, hardgoods, and linens. They would order from a catalog to get stuff you wanted that they didn't have. This process went back to the old west days. However, when *marts built a brand new store in the area. people did not have to wait they could buy pretty much anything at the store and take it home that day. On top of that because of the buying power, most things were less expensive. Now I know people also claimed that the products were not as good qualitywise, I won't argue that but I will say that is an opinion and other folks disagree. So now the little Smith store was put in a bind because some percentage of their customers are drifting away. Many of these businesses could not support the overhead and closed. that was sad.
So now let's move forward and look at the Home Depot, Lowes. Toys R Us, KayBee, CVS, Rite Aid, Staples, Office Max the category killers. They put smaller hardware, toy, pharmacy and stationery stores into the Smith store world in jeopardy. Cheaper, easier and in many cases much more product to choose from. So many small mom and pops stores started to collapse and shutter their doors. Bakeries and meat markets started to close because the supermarkets sprung up across this great land. So I guess I am making the point RETAIL IS DYING.
Here is where I say that it is not dying it is changing. Many ways for better and more convenient. Let's look at one industry, hardware, and tool world. Home Depot and Lowes have created a venue where you can go in and buy, wood, paint, nails tools rugs ETC... However, Ace Hardware and Tru Value are still strong and doing ok. The reason is they adapted. they formed cooperative buying and expanded allowing the world of DIY business to blowup. Now everyone is building, fixing and making the world better by doing it yourself. Companies like Do It Best sprouted up and these coops gave another way for smaller companies to be competitive and stay in business. So you can go into your local Ace and still get that hometown service and walk away with the product you want. The hardware business did not die, it got better, Yes Home Depot does draw a high percentage of customers but the smaller stores still exist.
Now let's look at another example of retail expanding. Years ago the craft business was yarn at the local store. Now with Esty and Pinterest and stores like Michaels, AC Moore, and Joanne Fabrics, there are venues where the sky is only as great as your imagination. The retail world has expanded and made a huge business.
My point is that although many smaller stores closed more business in the retail trade is going on. The customers are able to buy more product at better prices.
The real reason people are saying retail is dying now is because of the great behemoth AMAZON. Come on, the same things were said about Walmart and Home Depot. It is just a change in the way people get their goods. Is retail dying because of AMAZON? Of course not it is just changing. So as you go to the mall and you see empty stores it is very much like the towns in the midwest after *marts moved in.
Now the challenge is to have the retail the way the customers are best served. Amazon would not succeed if they do not deliver price, convenience, and quality. Walmart made its bones on convenience and price. Quality grew as they grew.
If retail is not dying where is it going. I wish I knew. I think you will find that the brick and mortar stores are going to have to figure out how to provide convenience, customer service and maintain price. It will be about customer engagement. The current customers want cool, quality, price and convenience. who is going to provide that? A friend of mine sees POPUP Stores as a vehicle and I have to admit that intrigues me. Others like Kohls are taking back Amazon returns, stores are doing away with the front end checkout using Handheld devices in-store. Many are using social media, phone apps, geo-fencing, loyalty programs and any number of ways to reach out to the consumer world.
I believe that the next big thing in retail is just around the corner. Watch and see. Support the stores/companies that best serve you.
Share This Post