A high end hat store is in a completely different category from most B&M retail and plays to different rules.
The last fedora I bought was purchased at a hat shop in Herald Square in Manhattan. It cost over $500.
I expect the red carpet treatment if I’m going to spend that much on a hat, and the store obliges. They know their stock, when I asked for beaver fur felt, the fellow knew exactly the hat for my taste and went in the back to find one in my size. He explained how to care for it, steamed it, provided a special brush for it, and so on.
I can’t imagine many retail stores being able to reach that level of service while still remaining competitive.
(I have been wearing it for many years, so I have gotten my money’s worth)
Sure, but in a hot job market like the current one, the likelihood of that MBA guy in the suit being willing to work at Home Depot is about zero. Same for the PhD holder, or even the ex-construction guy. All of them can (and likely do) make more money somewhere else.
It’s supply and demand; it’s why you start getting terrible service at fast food places when the economy is booming- anyone with any motivation or brain cells to rub together is working somewhere else for more money/better conditions(like Home Depot), leaving the people who literally have no other skills working there.
But when the economy gets worse, people get laid off and are willing to work for less/under worse conditions, so fast food places get a higher grade of worker for their minimum wage. Meanwhile, Home Depot may actually have guys in suits with MBAs, or ex-construction guys applying to work there, instead of in the corporate world or construction sites.
On the other subject, since the advent of online shopping, I’ve long felt that smaller, local stores ought to stop bothering doing stuff that they can’t compete with the big boys on, and concentrate on being THE place for the things you can outcompete them on.
For example, I live roughly the same distance from a Home Depot and a True Value hardware store, now that the October Dallas tornado wrecked the nearby Home Depot. So I go to the HD for stuff that’s essentially commodity items- sacks of concrete, drill bits, hacksaw blades, drain buildup remover, bulk screws/nails, etc… IF I don’t just buy it from Amazon.
I go to the local/more specialized stores for stuff that needs more hands-on expertise- if I’m trying to do something non-standard or can’t find the bolt/screw/washer I’m looking for, it’s off to the True-Value. For paint, it’s typically Sherwin-Williams or the local Benjamin Moore store- they can match shades a lot better than the goons at Home Depot can, and their supplies are higher quality as well.
That’s just it- your local hardware store isn’t going to outcompete Home Depot or Wal-Mart on commodity type items due to economies of scale. The big box stores’ supply chain and volume is going to cause lower prices on commodity type items than even the True Value wholesale outfit is going to be able to beat. So the littler guys are better off concentrating on stuff that Wal-Mart can’t do well- matching your paint exactly, or selling seeds/fertilizer that are optimal for YOUR area, or stocking that weird-ass pentalobe screwdriver that the screws on Apple devices use.
Then you have the overqualification problem. If I’m the hiring manager for Home Depot and the economy is in a recession, sure I might be able to get an MBA or a construction guy to work the floor at $11/hr.
But why would I want to hire someone who I know has their resume out to a million different places and will bolt as soon as another job comes along and/or the economy improves? Wouldn’t I still be better off hiring the minimally to moderately qualified employee knowing that he will be generally happy with the job he has, and any other job he finds will be in that same $11/hr range? Retraining is expensive. And again, as noted above, I don’t get any added economic value from having the highly qualified guy working at the store.
It’s interesting that JCPenney and Sears were the KINGS of you order it and we’ll mail it to you. But at some point they went all in on brick and mortar retail, and then got disrupted by new you order it and we’ll mail it to you businesses.
Sure the difference was it once was a printed catalog and now it’s an online catalog. But it’s got to suck knowing that you’ve been beat by a business model that you once pioneered.
The old school retailers largely missed the boat on the internet revolution. At some point, they decided that people either shop in the stores or order things on the internet for mail order, nobody uses the catalog anymore, so they got rid of it.
They didn’t get the “an online catalog is just like a printed catalog” concept. A lot of companies did not understand that the internet wasn’t just a thing where you ordered stuff out of a guy’s basement or a server room. They could have transitioned the catalog to the internet, but many, many companies could not see the connection and either went out of business or are permanently crippled like Sears and JCPenney.
You say “decreasing pie” but retail is growing, both in store and online.
In 2019:
In store sales growth accounted for 43% of all retail growth in absolute dollar terms (4% growth of a large number (i.e. 84% of retail)).
Online sales growth accounted for 57% of all retail growth (16% growth of a smaller number (i.e. 16% of retail))
Note: one of my previous posts cited online as 10%, which was based on prior to 2019 data (I believe) and also after seasonally adjusting the numbers (not sure what that formula entails but the person writing that article had arguments on why it was a more relevant number)
My brother in law & I had that very conversation recently. We’re both baffled by how they couldn’t go into the on line catalogue business in a big way.
Sears discontinued distribution of the general merchandise catalog in 1993.
Sears’ timing was perfectly poor. Had they held onto the catalog business until the late 90s, they might have been able to connect the dots, but they got rid of it before “e-commerce” had a chance to take off. Thus, they were dead in the water when Amazon finally started getting noticed.
The people I knew directly who had their applications discarded were high-school or college students, so not people who were likely to be offered great full-time positions anytime real soon, and this was in the 1980s and early 90s, so not a terribly tight labor market either.
I’m not sure how widespread that policy was, since a lot of Radio Shacks were franchises rather than corporate-owned, but it was a real thing. The high school here had an electronics class well into the 1980s (maybe even later), and more than one student proudly touted their classwork to the hiring manager, only to be told “we don’t hire you if you have taken any electronics classes.”
How does the problem of shipping fit into this story?E commerce depends on shipping, of course.
In the old days of the Sears catalog, I think it would take weeks to get your product.
Then, when Amazon started, it was books only. A book is easy to put in the mail, and most people don’t mind if it takes a week to arrive, and then they would expect it to fit in their mailbox.
But what I think surprised everybody was the development of fast shipping. The concept that it was practical to ship everything, of every size and weight, and deliver it within 48 hours. We take it for granted now, but it takes a massive infrastructure.
Just like the internet, which existed in primitive form in the 1980’s (Bulletin Boards, etc), but virtually nobody imagined that it would grow to what we know now.
How many people in 1990 would have dreamed of expecting the UPS delivery guy to leave expensive purchases on their porch? Was it even possible? And would consumers accept it?
Maybe two weeks if you ordered by phone,longer if you ordered by mail.
I can tell you are a Prime member. Yes, there was two day and even overnight shipping before Amazon. And not everybody has a mailbox that a book will fit in, so some of us were accustomed to packages being left on the steps before Amazon.
What Amazon really changed was not that they invented two-day shipping , but they made it inexpensive enough that people would actually have things shipped that quickly, which also changed what people were willing to buy. I never paid the fee for faster shipping when I ordered from Sears, but I could get free two day shipping from Amazon for $79 a year. That was about what I paid over the year for regular shipping- so I bought a Prime membership. Which meant I never paid extra for shipping on Prime items , so I could order a $1.99 item from Amazon without paying $4.99 shipping. And getting my order quicker meant I would order different things- my order history in 1997 is books, then some small appliances and toys and CDs are added and now I order all sort of things I wouldn’t wait more than a day or two for. I wouldn’t order shampoo or nail polish and wait a week to get it delivered , but I order stuff like that from Amazon all the time
One problem with making the leap back to “catalogs” is that now they had all these stores they wanted to protect, and building up a robust internet presence, at least early on, seemed like a threat to that. You have all these people whose lives and careers were wrapped up in stores, maintaining and building parts of stores, working in stores. They wanted the internet to bring people INTO stores, not serve to replace them.
As I remember, when Amazon started, Bezos began with books because the existing distributors (Ingram, Baker & Taylor, etc) already had databases listing all of the books and they could drop-ship books directly to the purchaser. I think initially Amazon didn’t actually stock any books itself but instead relied on the distributors. There was even a guy who set up an Amazon competitor out of his garage, stocking some of the more popular books and relying on the distributors to ship the rest. In short, the barriers to entry for starting an online bookseller were low.
It was only later that Bezos branched out into selling everything else and built warehouses and systems for stocking, retrieving and shipping.
I think you are right that the concept of fast parcel shipping was a key shift in thinking.
Prior to that thinking, the catalog companies probably had long lead times so they could optimize the cost of their facilities and manpower by keeping them at 100% capacity, as opposed to building for peak demand and having X% unused capacity during the non-peak times which is a wasted investment (unless you are Amazon and competing on speed/convenience).
While I’m aware of Amazon and Sprawlmart taking business away from “traditional” stores, I presumed that there would generally be a “thinning of the herd” for retailers.
E.g., of the major sporting goods stores, some (maybe half?) of the chains would fold but once that happened the remaining chains would resume their normal sales.
So I’m seeing chains fold, but the remaining ones don’t seem to be recovering. 'Tis odd. (Certain areas, like the niche JC Penney and Macys occupy still have a ways to go. I don’t expect any turnaround in that area for a long, long time.)
It’s also odd the difference between two-day and one-day shipping makes. So I’m thinking about buying something. See I’ll get it tomorrow (would Jeff Bezos lie to me?) so I order it.
I’ll just note that probably the best thing the retailers could do is turn to the boardgame cafe model where you mostly just provide a space for people to socialize in person, near a point of sell for their hobby.
JCPenney should install a parfait stand and free WiFi just outside the changing room, and encourage people to hang out and try out outfits.
This feels so backwards to me. I’d rather drive a short ways and try clothes on before buying them, rather than have to wait for them to arrive, trying them on after the fact, then if/when they don’t fit packing them up, leaving my home to ship them, and then maybe having to pay a shipping fee.
I only buy clothes online when absolutely necessary (like bras). A standard size tshirt or something, fine, I can order that online too. Anything else I would vastly prefer to try on and buy in person.