The Death Of The Brick And Mortar Store?

Walmart, Macy’s and Radio Shack suffered heavy profit loses in 2014 and 2015 forcing over 100 store closings each to brave the changing tide of the new retail economy. Articles suggest that customers are migrating to alternate means of product acquisition such as internet sales and cooperatives, procuring items directly from the source and cutting the middle man and its mark ups. In the land of the free, the brave are truly those who know how to save a buck while shopping for bare necessities. Extreme  couponing anyone?

The savings and convinient delivery strategy is not to be confused with frugality. We, as consumers, aren’t always aiming to find a bargain, we just want to feel like we are getting the items we need for pennies on the dollar. No one likes to save anymore, and people look for ways to continue to purchase items and spend money in a manner that makes them feel like they won. Some, unknowingly, pay a premium to have cheap goods deliver and could hardly justify the expenditures if a proper business case was prepared for the fiscal year. Legend has it you can find anything the store offers cheaper online.

Target and Toys R Us, for example, offered free shipping as an incentive to retain guests and cater to this need during the Christmas holiday rush. Sadly, Amazon Prime rates that include unlimited free shipping and deep discounts, have made consumers assume that using their system will result in a better deal. Because of this phenomena experts can make a good argument in favor of killing the brick and mortar store even though stores are still convenient.

There are those of us who like to patronize local business and shops that may not necessarily benefit from the online business model. Their goods may be too inexpensive to justify paying for expedited delivery. For some, the physical sale of goods is the only way to acquire products and they don’t undetstand why the local markets they support are suffering. Unless you get confronted by a recently closed store front you may not realize the franchise was in turmoil. I rarely ever anticipate the collapse of a brand and it is usually the ones I support the most the ones that go under. Smh. (Shaking my head)

Why is all of a sudden bad to purchase goods at a chain store that employs people and engages the community? Who decided they were pure evil?  Aren’t we supposed to be grateful we have jobs so that we have money to spend? If consumerism isn’t down and industries are reporting earnings, where is all that money going to? The shareholders?

This is where it gets tricky. The corporations are run by people who have to justify earnings and loses to a board. This board in turn has to answer to these ubiquitous people called the shareholders. The shareholders not only have bought stock in the company but have control of the business based on the percentage they hold. In a way, employees can be stakeholders because they own shares but their collective power is not enough to overthrow any decision made to keep the company from paying dividends at the cost of the hired hands. Sadly, it is the people at the top who screw us over just to make a profit even though we make the company, and therefore themselves, richer. The circle never ends because deep down inside everyone thinks themselves a possible future millionaire. Why change the system that could potentially make you richer?

In the mean time Amazon is opening bookstores in the past locations of their competitors even though their online sales platform caused the demise of the big box booksellers. Why? Because the stores put the Kindle in people’s hands aiding sales of a device they would not see otherwise. A marketing campaign can only do so much since the public will never truly embrace a product they cannot evaluate in person. Plus not everyone is willing to wait 5 business days to have their goods delivered. The more inventory you have online the harder it is for the consumer to find and buy a product. We are at the crossroads of the internet, where there is so much information that it is starting to put people off. As we lose our analytical and critical thinking skills and we trust Google blindly, opportunities to stand out in competitive markets become increasingly difficult to find. With all the adds and click bait, more and more people are turning to friends and family to make purchasing choices. Only those products that get a spot in front of the customer tend to win.

If Sears had pioneered internet sales they way they approached catalogues, they’d be in better shape today. Traditional goods and cheap splurges are easier to manage online because at some point we touched and used the product daily. The true challenge is breaking out in markets that are controlled by the big industrial giants. They can crush you like a bug before your webpage is even up an running plus not a lot of people will shell out hundreds and thousands of dollars for a product they can’t test out or understand. Ever buy something with dimensions listed and realized you never checked if it actually fit your needs? We all have packages of unreturnable merchandise lying around somewhere. The hassle of going to the UPS or post office to pick up or send a package can be daunting. I personally hate having to go to my nearest hub to get my box of expensive or protected goodies.  The time lost eats up any savings or apparent convenience, but that’s just me.

When you think about it, it is hard to see a full collapse of the traditional store and goods markets. Even in dystopic future movies like Wall-E or Idiocracy, the superstore seems to be alive and well. Cutting the middle man is not as easy of one hopes it could be. I can understand some industries will consolidate locations and brands, short of breaking monopoly laws, but in the end you will still need to walk up to a brick and mortar store to get items of first necessity. As some companies bow out, others will take their place. The mighty dollar will continue to claim those who get behind the times and don’t adapt quickly to technology. Let’s wait and see which ones make it to 2017.

GameStop pulled out of Puerto Rico because of the recent tax hikes; the same reason they left Spain. Some speculate that diminishing earnings from the resale of video games due to the move to digital downloads is the culprit. If it wasn’t for the fact that they recently purchased ThinkGeek and brought some memorabilia merchandise into their retail space, I’d agree they are closer to collapsing. However, most people still rely on hardcopies and launch parties. We’ll see if they are still standing next year…