First the column I wrote 7+ years ago:

WHAT’S A RETAIL STORE, GRAMPS?   By John Mariotti, ©2014

The time is only a decade or more in the future. Little 4-1/2 year old Susie just finished her Christmas—whoops—“Year End Annual Holiday” (YEAH) wish list using her latest 3D tablet. The list was instantly posted electronically to Gramps' and Gran's tablets. 

They reply with a question. "Would you like to go to a retail store to shop for your YEAH gifts? The answer nearly floors them. "What's a retail store, Gramps? And how do you 'shop' in one? What does 'shop' mean? How will I find what I want? Is there a way to ‘search’ for what I want? And then can we buy it and do we carry it home with us?"

If you think this is a far-fetched scenario, think again. Imagine the inefficiency of the entire retailing process. First someone must 'guess' at what consumers might want to buy. They are inevitably wrong, to varying degrees. Then the merchandise they 'guess' is needed must be ordered and transported either from the producer, or from a distribution center, to numerous stores spread all over population centers.

Then people must drive their electric or hybrid vehicles from store to store, wasting energy and creating traffic jams, consuming huge amounts of time, just to see IF the desired items are there, and in the desired shape, size, color, spec or whatever. Often they are not, so it is on to yet another "store" (even the name implies accumulation and storage of goods) where the hunt continues...often fruitlessly.)

The signs are clear that traditional "bricks and mortar" (BAM) retailing is in decline. America has been "over-stored" for decades, so a natural selection process continues to winnow the number of retail outlets, forcing losers to close and winners to adapt to an entirely new landscape of "shopping and buying."

Regional discounters were wiped out by Walmart and Target's growth, which devastated dozens (too many to list here) of less efficient discounters who no longer exist. The hulks of their stores still litter the urban landscape, unused or being torn down and/or repurposed. Big box stores fell next. Circuit City, Linens 'N Things, Borders, and more, are simply gone. Consolidation further narrowed the field as new retailing concepts emerged, spread, then consolidated all within a few decades. Wholesale/warehouse clubs are a prime example of are video rental stores, and recently, office products superstores.

The explosion of e-commerce, on-line shopping, behemoths like, and next day delivery is eating away at conventional BAM retailers faster and faster. Sears Holdings (Kmart) has been slowly sinking into oblivion, kept alive only by cash from real estate holdings. JC Penney is reeling after a failed makeover attempt. Office product superstores, spawned only 3 decades ago continue to consolidate and shrink. Office Depot & Office Max are merging, and Staples is closing 225 stores and shrinking the footprint of the remainder. Radio Shack, once ubiquitous, is disappearing before our very eyes.

Considering that the life cycle of both wholesale/warehouse club and office product superstore evolution was only 3 decades (early 1980’s to date), and that the rate of change in how goods are sold is accelerating, then Susie’s question is only a decade or two away from being realistic.  Even behemoth Walmart at nearly $500 Billion in annual sales is wondering and reconsidering what its “stores” should evolve to look like in a decade or two.  It is an enormous question for all retailers. Their very future existence depends on how well they answer it.

So, what's a retail store, Gramps? Little Susie's question is a harbinger of a future where a retail store is more of a "presence" than a "store." Retail stores of the future are more like physical "samplers" where "shoppers" want to see, feel, touch and investigate potential purchases--but not necessarily buy them. Ask Best Buy how this feels. Not so good, unless there is a newer, better revenue and profit model developed for BAM locations.

If this future of retailing were completely clear, everyone would be charging toward it, but it's not. What's clear is that just as hybrid autos are bridging the gap between gasoline/diesel vehicles and fully electric ones, and streaming audio and video are eating into sales of CDs and DVDs, there is a big transition coming. How soon no one knows, nor exactly what it will be, thus Susie's question might still be very appropriate: "what's a retail store, Gramps?"



Unlike many of my older columns and articles, this one is less than a decade old. It was also written before Covid even existed in anyone’s imagination—except maybe a few futuristic (apocalyptic) authors. As you read this, I suspect you will realize how impractical the way mass shopping is done, and why it is rapidly falling prey to better ways to choose—and actually find—find what to buy.

The naïveté of a child seemed a good way to illustrate the impossible shopping of today’s (yesterday’s) mass retail, especially department stores and even large discounters like Walmart & Target (who survived the demise of Kmart, Sears and a huge list of discounters who have disappeared in the last few decades. Some of those stores sales moved to “big box” specialty stores in electronics (Best Buy), sporting goods (Dicks), housewares (Bed Bath & Beyond), toys, (Toys R Us), etc. Those also are struggling, suffering and some have already disappeared

Home improvement stores like Lowe's and HomeDepot are currently thriving, because they offer both the abiliy to find and buy exactly what is wanted—with a degree of confidence in what need it fulfills. Departments stores are disappearing faster than the 17 year Cicadas. To survive, many are shrinking their formats, in hopes of finding a new “shopping experience” that is economically viable.

I once had a theory that a good indicator of retail financial success might yield a Surivial Index considering inventory turns and gross margins. It seemed that multiplying the inventory turns by the gross margin, might yield a number that was a Survival Index. For example, a IF big discounter like Walmart or Target had a gross margin of 25+%, and inventory turns of 5-6, that Survival Index would be 125-150. The same test for Macy’s might show its problems. Even at a gross margin of 33%, it would need 4-5 inventory turns to reach a Survival Index of 130-160, and to get the turns needed, discounting would drop the gross margin, thus reaching one factor in the Survival Index caused a decline in the other.

Shoe stores (e.g.,Payless—now gone) with a large number of styles and sizes have a bigger problem. Housewares, like Bed, Bath, similarly have problems with styles, fashions, sizes, and trying to offer multiple price/value choices in too many product categories. Sporting Goods are both seasonal and regional. Fishing in coastal (salt water) areas is far different from fishing in lakes (fresh water). Boating needs in warm climates and cold climates differ widely, as do sporting apparel (sizes, styles, colors, etc.). And they also carry shoes for many sports, in a range of sizes, styles, prices, etc. It’s hard to see how big box Sporting good stores can make the Survival Index.

The bottom line is that on-line pre-shopping is far more efficient, and thus it has grown rapidly. Shopping as a “recreation" is the only salvation of too many retailer stores/chains. Assemblages of stores whether Malls or strip malls, or Lifestyle Centers survive as destinations for “Recreational Shopping” where there are also resting, dining and beverage spots (Starbucks!).

However Covid is resolved—hopefully making gatherings possible via vaccines and seasonal boosters—recreational shopping can only save a fraction of America’s “over-stored” retail environment.  Just as many restaurants are pre-order and either pickup or delivery, so too will the new normal mean pre-shopping on line then deciding whether to do pickup, have the goods delivered, or go for the old fashioned “treasure hunt” for “good deals” among way too many choices.

Putting other recreational options where recreational shopping concentrates, will define many of the new “centers.” The malls of yesteryear and the huge “anchor” stores, are dinosaurs just waiting to become extinct. Plan to survive by capitalizing on a very different “New Normal” future, or join the many who are going or gone extinct. 

Which retailers will survive? And why?



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