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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.
On the weekends, Costco usually has 10 lanes of cash registers with 10 people in line each, with baskets loaded to the top, followed by long long lines to pass by receipt checkers to exit the building...The downfall of "retail" isn't all about Amazon.com and online clicks, it also includes the rise of these warehouse stores that sell superior quality produce and products (except for their accidentally unauthorized jewelry and slightly obsolete electronics) as well as buying basic household goods in bulk to reduce cost in a country that has had depressed wages for twenty years. Because of the lower overhead, warehouse stores can be a much cheaper way to buy things than ordering online from Amazon and still offer some of the seasonal and local customizations that Department stores once did.
I need to hurry up and film a zombie film in our local Sears before they close they place down completely.
Going in there is creepy as hell.
"You compared prices in foreign countries not on par with labor in your own."
the labor was foreign either way. only the middlemen and executives were American.
"You subverted Tariffs that would have protected domestic value to an appreciable degree."
He made no mention of avoiding tariffs, taxes, or import duties. Only that he bought directly from the source, which is perfectly legal to do.
"You bought something of casual or leisurely nature, ignoring the state of the arts locally around."
he's not buying a Chinese knockoff of something. He's buying the actual product. Just skipping the middlemen.
i could live a little longer in this prison
Retail itself, traditional retail anyway, is one of its own four horsemen. It can't get out of its own way because the people who run it aren't capable of thinking in a way that will save them from what is happening.
I found something I needed and what seemed like the only reasonable way to get it was via Walmart's order-online-pick-up-in-store system. So I ordered and 5 days later I get an email saying it was ready to pick up. Slow, but not a deal breaker. The email directed me to 'follow the orange signs to the pick up area'.
So I drive to the store and see orange signs and follow them. I come to a parking lot where signs directed me to call a number and someone would be out. It turns out that that area was for online ordered groceries only, and the person on the phone had no idea where to pick up non-grocery items.
I decided a graphic in the email was a map to some location inside the store, so I park and go in and awesome there is an area with an orange sign, a few ragged chairs, and a kiosk. Something about scanning a QR code but the scanner didn't work, and instead I typed my order number into the kiosk. My name appeared in a queue on the screen and the screen assured me someone would be along.
After 5 minutes or so a typically disinterested retail employee came out with a single box that weight about 1 LB and asked me to sign.
Me: This can't be it, my order is probably in several boxes and weighs about 300 LB
Her: No
Me: Yes look at the confirmation on my phone
Her: I will go look in the back
15 minutes later she appears with a cart with several boxes. I glance through them, one is missing. She says she can call corporate Walmart tomorrow and see if they can find it but she is sure without a second pass through the back she didn't miss it. I realize she just wants me to leave so she can go on break, and I really need this stuff now, so I sign anyway.
On the way home while sitting at a stoplight I order the missing part using my Amazon app and someone drops it on my porch the next day.
I wrote all that to say that the level of thinking that designed the Walmart process cannot compete with Amazon. It can't, it has 0 chance. It might keep obliteration at bay for a few years, but it will lose eventually. The only way traditional retail could compete would be to hire all new people, burn down all their stores, and start over. It can't win on convenience, it can't win on speed, it can't win on experience. It is a monoculture of price reduction and now that an alternative has appeared that can beat it in that area, it can't change quickly enough to survive.
It can't win on convenience, it can't win on speed, it can't win on experience. It is a monoculture of price reduction
It's been a monoculture of selling lower quality with worse service at a lower price than the competition for a long, long time. Sears drove away mom and pop stores several decades ago, K-mart essentially drove Sears out of business a few decades ago, Walmart drove K-Mart out a couple of decades ago. Now it's Walmart's turn.
There won't be an apocalypse, just another iteration of the same cycle.
Trying to serve the poorest people - who only shop at the places with the lowest prices - is part of the retail problem. If the store is focused on low prices, they can't afford to focus on anything else. This is how Wal Mart came to be reviled by anyone who can afford to not shop there.
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.