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America's 'Retail Apocalypse' Is Really Just Beginning (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry. The industry's response to that kind of doomsday description has included blaming the media for hyping the troubles of a few well-known chains as proof of a systemic meltdown. There is some truth to that. In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year. But chains also said 6,800 would close. And this comes when there's sky-high consumer confidence, unemployment is historically low and the U.S. economy keeps growing. Those are normally all ingredients for a retail boom, yet more chains are filing for bankruptcy and rated distressed than during the financial crisis. That's caused an increase in the number of delinquent loan payments by malls and shopping centers. The reason isn't as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt -- often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder -- even for healthy chains. The debt coming due, along with America's over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what's coming next could truly be scary.
Here's the thing - I'm old. Not ancient, but middle-aged. So I'm probably not expected by younger people to be comfortable with the latest technologies and customs, right?
Except when I'm buying things I check Chinese websites first, because the stuff I could buy from a local retailer is generally 1/3 the cost if I get it direct from China, and it's generally the same damn item, only with a lot of unnecessary middle-men removed from the equation. Cutting out a couple of warehouses, an extra trip on a truck, and a whole chain of office and retail workers saves quite a bit of overhead.
For me that's usually just low end electronics stuff that'll fit in an international mail envelope, but there's all sorts of other stuff, too. Hell, you can get tailored clothing for the price of local off-the-rack stuff.
Retail is having the same issue the cable television industry is having - the economics have changed and they haven't found a way to adapt. I don't need to drive to a big box store or a mall to pay 300% more for something when with a bit of patience it comes to my house for a lot less.
I think the biggest change is that we are no longer really looking for stores, but showrooms. We need a place where we can go and look at the products, touch them, see if they do what they are meant to do. Then we can buy them online. These showrooms may have some small stock but their revenue will be from renting space to the company to showcase their products.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
there is a tremendous amount of real estate consumed by retail outlets, which frankly are of far diminished use than in previous decades. if someone can order something on Amazon and get it delivered to their door in a day or two, there's little reason to get in the car and drive to a store. this works well for a huge chunk of your average person's shopping.
in terms of the employment impact: those affected skew young or low income. and the jobs aren't merely shifted to a different country or location -- most of them are no longer necessary at all. for now, at least, most warehouses and shipping hubs rely on human labor, but that work represents a small fraction of the manpower a proportional retail store would have employed.
it's a problem, but in my opinion, likely a short-term one. i foresee a dramatic upswing in remote, online employment across the board, as online communication and interaction tools mature, and a willing and capable labor pool emerges -- a pool of young people to whom this technology is as effortless and natural as walking.
an optimist might even suggest that this would allow people to more easily aspire to niche occupations and careers that they would have otherwise been unlikely to achieve due to geography. In the past, if you wanted to work in the pinball industry, you had to live in Chicago. If your passion was recording music, you'd almost have to move to Los Angeles or NYC to make a living at it.
Today, there are artists who draw playfields for Stern Pinball without setting foot in Chicago. and my brother does mixing and mastering remotely over the internet for people all over the world.
just like those brick and mortar sales, the job market isn't going away. it's just going online.
i could live a little longer in this prison
Sears killed itself by over-pricing it's competitors so that shouldn't be a surprise. When you can buy a snowblower from canadian tire for $300 and you can walk out the door with it and sears is selling the same model for $700 that will come in 4 days. It's pretty easy to see what's going to happen. Same with major appliances, clothing, and so on. Round that out with the absolute worst customer service around? It was one compounding stupid error on top of another.
Kinda like Target when they opened up here. Far too many stores, no inventory chain, hugely overpriced compared to their competitors. Many cases the store shelves were empty and they had no product to sell at all. Then there was the belief by the CEO that Canadians would "pay whatever we tell them to pay for goods." Sorry guys. The middle class in Canada is already stretched to the breaking point, that's not how it works.
Om, nomnomnom...
The philosophy of actual socialism is that helping everyone results in a better society.
Instead of only getting the benefit of genius's who come from wealthy family, you get the benefit of all genius's- even those born in poverty because you provided them food for their brains to grow, education for their brains to reach full potential, and reasonably equal opportunity for them to express their genius when they are adults.
As opposed to the alternative which is that the genius's from poor families are replaced by average (or even sub-average) people from wealthy families.
The U.S. is not a meritocracy and hasn't been for about 5 generations. Many of the good and important jobs are virtually inherited by the children of people who were brilliant. The son of a senator is a senator. The son of an actor pushes out other better actors who are not the son of an actor.. The sons of judges are lawyers or judges and so on.
it helps the kids, but it hurts the country.
Socialism mitigates that tendency but can't erase it. But the relation between child and parent wealth is lower in socialist countries. In the U.S. it's highly correlated these days.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.