Department store sales hit a new record low in the data going back to 1992.
E-commerce sales in the fourth quarter soared 12.1% from a year ago to a new record of $132.8 billion (seasonally adjusted), the Commerce Department reported this morning. For the whole year 2018, e-commerce sales blew through the $500-billion level for the first time, reaching $513.6 billion, up 14.2% or $64 billion from a year ago.
Not seasonally adjusted, e-commerce in Q4 jumped to $158.5 billion, 11.2% of total retail sales. E-commerce sales have doubled over the past five years.
E-commerce includes sales by the online operations of brick-and-mortar retailers, such as Macy’s, Walmart, and Best Buy, along with the sales of online-focused retailers, from small operations all the way up to Amazon.
People still say that e-commerce accounts for only 11.2% of total retail sales and therefore doesn’t matter. But this metric is misleading because e-commerce doesn’t yet seriously compete with a number of retailers, including gasoline stations, new and used auto dealers, and grocery and beverage stores. These three categories alone account for 52% of all brick-and-mortar sales.
Where the e-commerce bloodbath takes place is in other categories, including – with some choice casualties in parentheses:
- Department stores (Sears Holdings, Bon-Ton Stores)
- Book stores (see Borders, B. Dalton, Waldenbooks)
- Video stores (Blockbuster),
- Music stores (Tower Records)
- Hardware and hobby (Orchard Supply Hardware)
- Toy stores (Toys ‘R’ Us)
- Jewelry and accessory stores (Claire Stores)
- Sporting goods stores (Sports Authority)
- Electronics and appliance stores (Circuit City, CompUSA)
- Clothing and clothing accessory stores (Limited Stores, Pacific Sunwear, Aeropostale)
- Shoe stores (Payless Shoe Source)
The chart below shows who is winning this race. The blue line represents sales at these mall stores, and the red bars represent e-commerce sales. Note how resistant online sales were during the Great Recession: They dipped, but only briefly, and then continued soaring. But sales at mall stores took a deep dive during the Great Recession and have still not recovered from it, and will never recover from it:
Sales at these mall-based stores that are under attack from e-commerce fell to $159 billion (seasonally adjusted) in Q4 2018, a level they’d first reached in Q4 2005, while e-commerce sales soared to a new record of $132.8 billion. And the above chart is not even adjusted for inflation! E-commerce is killing these stores, one after the other:
Department store sales have plunged 37% since their peak in 2001 — not adjusted for inflation! — to $37.1 billion in Q4 2018, a new record low in the data going back to 1992. These are the stores that anchor malls. The sector is populated by the brick-and-mortar stores of Macy’s, bankrupt Sears, soon-to-be bankrupt J.C. Penney, liquidated Bon-Ton Stores, and Nordstrom whose booming online sales were already one-third of its total sales in Q4, while its brick-and-mortar sales declined.
The chart below of sales at department stores going back to 1992 shows an industry that is slowly dying – not because Americans are “tapped out,” but because the mall-store business model, and particularly, the department-store business model is being obviated bit by bit, year after year, by e-commerce:
Store-closings by retail chains, and malls losing their anchor stores, are now a painful routine. The largest mall landlord in the US, Simon Property Group, said in the last earnings call that the company’s president is sitting on “his 200th unsecured creditors committee.” That’s how many bankruptcies and restructurings SPG’s tenants have gone through so far.
Sales at electronics and appliance stores, despite the booming business in electronics and appliances, have dropped 11.3% over the past 10 years to $24.4 billion in Q4, as much of it has migrated to online operations, including to the successful online operations of brick-and-mortar retailers such as Best Buy.
Americans have figured out that buying a large-screen TV or a dishwasher is easier and often cheaper online, with delivery and installation – same issues as with a local store – included. And buying smaller electronics online has become normal years ago.
Retailers that have decided to carve out a future for themselves have invested heavily in their online operations, including in their fulfillment and delivery operations. Many of them are succeeding in these efforts. This isn’t about Amazon – this is about thousands of small and large retailers that are making this transition successfully. It has taken two decades to get this far, and it will take many more years to play out completely. And those that fail to make the transition will fall by the wayside.
Nordstrom just did a surprising thing that other major retailers keep a secret: It disclosed how its own booming online sales, now one-third of its total sales, eat its brick & mortar sales. But it’s a matter of survival. Read… The Biggest Retailers Are Too Scared to Disclose this Data. But Nordstrom Just Did
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The nineteens had a lot and I meant a whole lot, of stores build, and malls, malls freaking everywhere. There was some trouble when the Internet bubbled pop out and then the trend continued… until 2008 I think?
What you even fo with all those malls that are being abandoned? And let’s not even start with abandoned gas stations, cleaning those places up to regulations is so expensive that the only use you can get from a former gad station is to either make it a car wash or a place to store dangerous chemicals.
Abandoned malls and gas stations are becoming a problem in the USA…
Small stores? No problem, they can be easily used for something else. Medium sized? A bit more complicated but not a huge problem.
But malls? Not everyone of those can be turned into a community center or be bought by some company to use as office space and so on.
And again, abandoned gas stations… the cleaning up and filling is so expensive is no wonder a lot stand years and years without being used for anything else.
No wonder regulations are pushing for new malls to be build miles away from cities, that way when they die they become less of a problem.
Not less of a problem for those of us who left the city to get away from its problems.
Beneath the malls are buried the polyester leisure suits of the 1970s.
Especially all those garish plaids !
Let’s not forget the white belt and shoes. Some things are better off dead.
Don’t worry about the abandoned malls. Evangelical churches will always need the space.
Convert into horizontal/vertical gardens…..grow mushrooms…….Abandoned mines in Pennsylvania good model…..growing millions of pounds of mushrooms for decades.
Housing the homeless!
For anything other than the usual weekly grocery, household & gas shopping:
I would love to see the day when online services (and NOT Amazon or Google) would let me search and find comparable prices for any product or service available for sale within 10 miles of where I live or work.
The actual purchase could be online or in-store depending on whether I need to see the item or talk to the service provider before buying. I’m thinking of something like the airline ticket shopping experience, or the traditional village marketplace where everything for sale is all in one place.
It saves consumers enormous amounts of time and money not to have to guess at which retailers might have something and then have to hunt through single-store online catalogs or drive all over to find it. That’s where Amazon can really be amazing. But it wastes enormous amounts of time and money to order from Amazon and have something custom-delivered. That’s where local is better.
Keep the products in local stores and warehouses, put the data about the products out for everyone to search, and let the question of “store pickup or delivery” sort itself out. All that’s needed is a standard data protocol for each type of product or service, a store inventory-broadcasting software, and a server to integrate the data and make it searchable for consumers. Amazon basically already does this but no one else seems to know how to get their act together.
If I’m understanding you correctly Wisdom Seeker I think the Walmart app and Home Depot website do what you’re asking. Although presumably, you mean across all stores.
Right, I want the app that gives me all products available for sale, regardless of whose store, warehouse or garage they are sitting in.
What I want is a Retail Alliance to fight the Amazon Empire by sharing their inventory data and putting out a shopping app that lets you get whatever you want, from a local store, with far less hassle than having to hunt through 10 separate chains.
I don’t want Home Depot’s app, or WalMart’s app. I don’t necessarily want to go to Home Depot. I don’t want to have to look through 10 separate inventory databases to find the thing I’m looking for that maybe only exists in 1 or 2 stores.
I want Home Depot and Walmart and Lowe’s etc. to finally actually compete with Amazon by putting all their data out, so that a single app can shop through all their inventory and tell me which stores have the widget I want.
Amazon is basically doing this for nearly every product already, just not inside everyone else’s walled gardens. And Amazon is eating their lunches because the other guys think they can only advertise what they sell themselves.
Linking back to Wolf’s thread, the whole reason why Department Stores became a thing was because they were the one-stop shopping of their day. Ditto with supermarkets for food. Back before department stores and malls, supermarkets and cars, shopping was a nightmare of hiking all over to find individual items in widely separated stores.
Today, shopping is a nightmare of searching all over the internet to find individual items in widely separated stores. Amazon is like the department store and no one else even gets the concept yet.
@Wisdom Seeker
If I understand you correctly, you would like to have something like this:
https://www.idealo.co.uk/
This thing exists in many of the European languages and I use it regularly to do exactly what you mention, that is, search for a specific article in a host of shops.
Unfortunately, at the moment this works only for articles offered online, by pure E-shops or by shops that also have a brick-and-mortar presence. It does not include offers that are only available in traditional shops.
Does something like this not yet exist in the USA?
There are browser add-ons like Honey, Invisible Hand, Camelizer, and WikiBuy that do that. Try them. Google “Browser Shopping Add-On” and have at it.
Why shouldn’t manufacturers do that, to eliminate the middleman profit? The alliance would be the “retail” front for manufacturers, so that all retail profit goes back to the manufacturer.
Of course, all these ideas cut retail jobs via technology improvement, and people wind up paying additional cost through higher welfare and displacement taxes. This is why Bill Gates proposes the robot or technology tax, so that those selling technology help bear the cost of displacements that they caused.
@ Wisdom Seeker
Your idea has a lot of merit. I found out a couple of years ago that most US junkyards now have a shared database of their collective inventory, which has utterly transfirmed the experience as well as the availability of parts.
The biggest obstacles would be Amazon and Walmart. What you want is exactly what they don’t want, unless they get a cut.
Before there was the Sears mall, there was the Sears catalog. The online store is only slightly faster. Some businesses adapt to technology better. The nature of technology, which leaves us in a constant state of revolution. The people who understand technology don’t usually understand business, and they apply the old robber baron ethics, in order to exploit an “over educated” labor force. When the consumers have no more wages we issue script, UBI, which is supported by the Bezo(s) family. This is why OAC is turning (the old corporate) socialism upside down, consumer is a derogatory term, as the shortest distance between two points, (garbage) money in, (garbage) money out. The plaintiff is moving away from consumerism, and wants nothing to do with a more streamlined guillotine.
The actual “traditional” business model is highly questionable for e-commerce + the last mile delivery. It is simply VERY expensive (and again, in the “traditional” sense not a “real”/profitable business model).
Amazon only exists/survives because of two things: appreciating stock price (and total market), and web services. The e-commerce part is a non-profit organization.
The clicks and mortar variation of buying on-line and picking up at the mortar store might be the answer. Amazon doesn’t really do this. I think its grocery attempt may also fail.
Reminds me of Enron and MCI (except Amazon isn’t doing it illegally): enormous market distortion caused by one firm with a “non-traditional” source of “funding”/cash.
Similarly- look at Uber, Lyft and many other of these tech companies. They are extremely good at losing money in traditional business operations.
Wisdom Seeker,
What a great idea.. Hope someone picks up on it and runs with it.
They used to have shopping bots, don’t know what happened to them?
If you get the app for most big box stores on your phone, they will tell you what items are in stock at which store. Walmart, Target, Home Depot, Lowes, etc. Walmart often sells stuff for way cheaper than buying it online. It’s not worth it to buy the common cheap household items online
The common, cheap household items wont be cheaper online but it will be more convenient to buy them online.
I’ve given up, I can’t seem to obtain my favorite foot powder, so I ordered a 3-pack from Amazon. Only a little bit more expensive than at Target and a bit less hassle factor.
I hadn’t thought about this, but my local, small-town Canadian Tire store will not only tell me what’s in inventory, but also which aisle to go to. That is pretty impressive, and often worth running the search. Their website is clunkier than Amazon’s, but it’s good enough. Canadian Tire has withstood the invasion of US big box stores (q.v. WalMart), and is holding its own in the online world, as well as having defined its own space (I can’t think of a comparable US Store…. auto supplies are maybe 20% of the business)….
The hardware stores will always have the upper hand for the handyman. Nobody orders online if you forget something just before starting a project; just hop in a truck and drive there! ..maybe Canadian Tire in future will eventually open American Tire stores in the empty retail lots.
you just described a mall and every store in a mall.
All stores are in one convenient location. All stores have online information to call at the very least and some show stock – all of these actions can be done on a smart phone currently.
This system isn’t working, people want stuff brought to them while they shop while sitting on a toilet. It is sad to see.
” people want stuff brought to them while they shop while sitting on a toilet. It is sad to see.”
Well, I live in a remote rural area and am glad to shop sitting at my computer desk.
I’m not going to let you or anybody else see me sitting on the toilet, sad or otherwise.
Wolf he has Alexa toothbrushes so you not be so sure. I not going to be working for Alexa tho.
take the phone in the bathroom and someone just might see you, sad or otherwise. The device has 2 cameras and plenty of backdoor program access.
Enjoy those peaceful #2s lol
Good luck finding an app like that on a Google search
There already is something like what you are looking for – an App called “Pointy”. Mind you I think it’s more for the retailers, not buyers. But it’s in line with your idea. For buyers, it seems the key is you have to use the words “near me” in your searches.
https://techcrunch.com/2017/09/20/pointy/
https://www.pointy.com/
An anecdotal tidbit I’d like to share is the apparent switch from clothing stores aimed at a more middle-class audience like JC Penny, Macy’s and yes even Sears. Towards off-price stores like Gordmans, Ross, and TJ Maxx (a hollowing of the middle class?)
I remember as a kid my mother would purchase our school uniforms at J. C. Penney and it was a “special occasion” even though I didn’t see it that way at the time.
Apparently, certain retailers have been spared from the e-commerce carnage, but is this forever sustainable or is grocery delivery to your house the next big thing?
After all, HelloFresh and Blue Apron don’t seem like they will be successful or perhaps even survive long term without the invention of central banks if you catch my drift.
Every supermarket, even Aldi, offers their own “flatpack” meal-in-a-box so i don’t see how the subscription model can survive. HelloFresh is even starting to sell them through supermarkets.
Looking at Amazon and their planned ones a week delivery date will be used by Amazon for an attack on the supermarkets for stuff that isn’t Fruit&Veg, Meat or Bread.
Perishable foodstuffs are already being delivered everywhere by WalMart, etc., freeze dried or canned.
Specialty “prepper” websites, too.
Freeze dried or canned is not fresh.
Bit the bullet and bought an Amazon Prime membership today after putting it off for almost a decade.
I did the same, just to get streaming video, but it’s hard to stop once you’re signed one….
Note that my Amazon Prime is no good on the US or UK websites (the UK often has better buys on books and videos).
Surprised you want to openly admit this, not really a smart move. Haven’t bought anything off Amazon for years. Some of us saw the light a long time ago. (Can’t you find any other websites? Or just can’t be bothered?)
I spend a lot of time looking for specific items and invariably end up on Amazon for 50% of my purchases. I didn’t have Prime, but now it makes sense as it comes with the 5% cash back and perks. Groceries are still mostly local.
THIS is why everyone else needs to get their inventory databases online and linked by a single shopping/search app, so people can shop a planetary mall without having to hunt through a million websites with separate, confusing interfaces.
I still don’t have one, and I’m fine, actually. I think I’m now a minority :-]
I’m enjoying loading up my browser with Amazon pricing-cookies and then go to another site that will then try to beat those Amazon pricing-cookies with lower prices, and free shipping if I don’t hafta have it right now, which I never do. Works! Buy most of my crap from non-Amazon sites.
Bezos is not satisfied with being the richest man in the world. It seems he also wants Amazon to be the only store left by destroying ALL of the retail store competition. Since Amazon now sells most everything that anybody needs, after all brick & mortar established have closed and they all have moved to selling online, what will we do when the Internet goes down?
Brad Rogers
Bezos is not destroying those other stores – it’s the independent buying decisions (aka free market) of hundreds of millions of consumers doing the job.
The sun will come up in the east tomorrow & sooner or later, someone will come up with a retail model that beats Amazon.
@ JC
It is interesting though, a lot of it is about consumer choice and market power. It’s the argument I’ve heard about so called tech giants. They aren’t using their market power specifically in the classic monopoly sense, after all, the consumers are free to choose to not use them.
But the combination of network effect and these companies making their capabilities more useful to the end users tend to reinforce the behavior of the consumer.
Take Amazon for example, Bezos certainly had it right, sell stuff cheap… not always, but enough to drive users to his site, so it becomes gradually a convenient one stop shop, saves time, and look, free stuff like Prime videos, I mean who doesn’t like Amazon Prime with its free stuff. He isn’t preventing anyone else from copying him. But the barrier to entry is so high that no one else can. And the funny thing is, most of those barriers to entry he built by becoming more useful to the consumer than the next guy.
It’s all screwed up. I suppose the alternative is what people like Elizabeth Warren proposed, and even though it sounds “fair,” it reeks of attempt to manipulate the economy by letting government set the rules to picking winners and losers. I know, I know, they already do that, see defense contractors.
I’m sure one of the Democrats will propose a progressive tax rate in the corporate arena. Right now, all companies big and small pay the 21% tax rate. How about a higher rate that applies to corporations with incomes over $5B and $10B? This would fund a lower tax rate for the smaller companies that are getting hammered by oligopolies and influence. This would automatically do the work that anti-trust regulators are not doing currently, and I believe such a tax would be quite popular, as well as revenue neutral.
Mentioned to one of my children that my trusty “decades old feather duster” was going Kaput……they purchased one on Amazon; delivered to my doorstep in a box that in ordinary times could contain 100 of these feather dusters; one duster plus three puffed up plastic cushions. What a terrible waste of paper product. That is my main criticism of purchasing so much on line….all that waste. Of course you can say you are saving “carbons” by not driving all over creation shopping……
MCH
Good points, especially about the “new monopolist” behavior of tech giants. Before Sherman Antitrust Act & Clayton Act, the effects of monopolies were painfully obvious, but back then, the vision of how to define & control them was probably pretty fuzzy.
I suspect the same is true for todays “tech giants”. I’m a retired CFO and pretty red-blooded capitalist, but I’ve always understood effective regulation is required for the health of any financial system (including Capitalist).
With the above as prolog, I doubt Amazon is killing B&M retail – the e-business model is doing the killing. Breaking up Amazon is probably healthy, but I doubt it’ll slow people wanting to shop online.
The obvious & desired major change is dispersing & preventing the huge financial distortion of concentrations of wealth by single individuals/companies. Dispersing those concentrations allows several owners to experiment with the e-business model; inevitably one of these will supersede current-Amazon in terms of customer preference.
An Amazon slave will probably not be thanking you for signing up.
If nobody signs up anymore and Amazon goes out of business tomorrow, this slave will be out of a job.
Do you think he will be thanking anybody for that?
Is free market invisible hands taking care of other. Poor slave, he know he want freedom he just chasing where they put money like he taught to :-( .
I just shopped around for 2 items – set of white pasta bowls and set of white espresso cups and saucers. After 45 minutes, I bought the bowls from Crate and Barrel and the cups and saucers from Amazon. Saved me a total of 5 dollars. Now two sets of slaves will (or will not) thank me.
Been buying from Amazon since 1997 (one order that year – a book – that’s all Amazon sold, back then).
Over 1100 orders total, now.
Amazon’s ability to keep track of its customers is legendary (not appreciated by everybody, to be sure) and you will find that, after you’ve been with them awhile, they sometimes go “above and beyond” to get orders to you.
BTW, they sell Idaho potatoes, fresh, canned and otherwise:
https://www.amazon.com/s?k=canned+idaho+potatos&ref=nb_sb_noss
I grow Idaho potatoes in cardboard boxes :-)
Every choice in life is a moral choice… I refuse to directly support Amazon because I find their business practices evil. Plus, I detest the founder…
When they started I made ebook purchases, but haven’t purchased anything from them since.
—-
Avoiding indirect contact with Amazon is impossible. AWS pervades everything on the web.
Wait until you bump into some of the stuff the US government does…or the food industry…or learn about rare earths in PCs…we won’t even talk about the internet..
Indeed, everything is a moral choice.
There is another angle here that is sort of obvious but potentially big enough to mention anyway.
Best Buy and Nordstrom are doing well at e-sales but it is eating the brick and mortar. So they are ok losing on one hand but gaining on the other?
They are still retailing stuff from a supplier who sold to them wholesale.
What if the supplier decides to retail directly?
Let’s say you are a manufacturer of dishwashers. Right now you are supplying wholesale to a big box retailer. You see people are ordering online from the retailer. What is the barrier to selling online yourself?
Obviously the customer is not going to get the unit sitting on a floor quite as fast, but soon.
Then there are big ticket scare cards: service and warranty. The manufacturer can negotiate a deal with a big local plumber for install
and service, probably as good as whatever Big Box offers.
Maybe the pressure that right now is on brick- and- mortar retail will threaten retail itself. Once the requirement for a physical retail space is gone, how much of retail itself will follow?
Go to Alibaba or Aliexpress and you can see the manufacturers that will sell directly to the public.
If only they could become as easy to use as Amazon is ( or was as those paid ad in the Amazon searches are deteriorating the serviceability of the site).
Right now its extremely difficult to buy from them and the prices are out of whack and often its more expensive buying direct than from Target or Walmart.
Some sites (Amazon is one, I think) are best used with an ad blocker.
Long ago, in a galaxy far away, that would have resulted in the government bringing anti-trust proceedings against the manufacturers. But given that there’s no longer any such thing as “Too Big and Powerful,” it is a curiosity why it hasn’t been tried.
Yea, you do have the vertical integration thing to worry about.
Selling wholesale to a couple thousand (or hundred thousand) buyers is one degree of difficulty; selling retail to a couple hundred million is WAY different.
Hmmm, monopolies in the classic sense is usually targeted on the horizontal portion of the market where one competitor gains a stranglehold, I may be misremembering, but that’s what did in Standard Oil, or was it Carnegie Steel (I just remember one was vertically integrated, and the other hand a strangle hold on one segment of the market). It’s much harder to target these vertically integrated guys because they focus on pulling you into their walled gardens, where everything from top to bottom is vertically integrated. But you always have a choice to not go. But if you did go, and liked it, you’re sucked in forever. Kind of like the iPhone in the early 2010s. Even today, that ecosystem is a draw. Although less so, now that everyone has caught up.
Take another example, you could literally live your entire life shopping only at Costco too. Heck, I’m going to buy a car through their auto program. I don’t see anyone else in a rush to bust Costco up. Now, they buy from other brands, and leverage their market power, but that doesn’t stop them from selling their Kirkland brand.
So, the real question is should consumer actually be forced to choose something other than what they want for the greater good, so that there one company doesn’t achieve monopolistic power because it is “completely, totally focused on the customer.”
I’ll stick to Amazon, because the argument doesn’t apply quite as well to things like Facebook. (Although there, you can argue that it has leveraged network effect to achieve a monopoly, so what do you do, kick people off?)
That’s an interesting point. It makes me wonder if Amazon has any kind of durable moat once the ordering platforms are commoditized. One stop shopping at Amazon isn’t such an attraction if you can get a cheaper price somewhere else. It’s easy for Amazon to undercut a brick and motor retailer, but it’s not so easy undercutting another online site that also owns the manufacturing. Arguably, Amazon would be disadvantaged because it has to build out a more expansive platform to deal with suppliers.
Amazon is attempting to cut back its platform by switching to what amounts to brokerage for supplies sold direct, rather than through their warehouses:
https://forbes.com/sites/warrenshoulberg/2019/03/11/is-amazon-getting-out-of-the-direct-selling-business/#157e67196130
While ordering platforms aren’t exactly commoditized (unless one considers the entire web an ordering platform) comparative shopping is easier there than at brick and mortar.
For example, if you’re looking for a lawm mpwer, it’s easier to visit the websites of Tractor Supply, Lowes, WalMart, Home Depot , Amazon and _______ (fill in the blank) than to travel to first one then the next (etc.) brick and mortar store.
As far as I am concerned, Amazon will succeed in becoming a brokerage (or fail, as Bezos has warned will happen eventually) depending on how well they can maintain their own customer service applied to brokered goods.
Maybe private group bulk ordering from source will follow so as to help afford the lack of income due to loss of retail work, taking out the current e-commerce middlemen in the process :-/ .
I think the B-school types have amassed a decent amount of case-studythat organizations optimized for efficient manufacturing will suck at warehousing and retail. Those optimized for warehousing and distribution will suck at manufacturing and retail. And those optimized for retail won’t be too good at manufacturing or warehousing/distribution.
I don’t have a ton of evidence for this myself, but wonder what others think?
Makes me think of a joke sign in service from my days in the moto-biz:
“We can offer you three kinds of jobs- (1.) Good (2.) Fast -or- (3.) Cheap
be aware:
A Cheap job Fast won’t be Good.
A Good job Cheap won’t be Fast.
A Good job Fast won’t be Cheap.
Your choice, no substitutions.”
May we all find a better day.
Not sure about the US, but in Canada Best Buy seems determined to make its remaining bricks & mortar stores irrelevant. I got a dashcam there. It stopped working, so I took it back to the store, They replaced it but told me “Normally after 30 days you’d have to deal directly with the manufacturer. We’ll exchange it this time but in the future you’ll need to contact the manufacturer directly.”
Thus, the ONLY reason I have for buying something locally – ease of return/exchange in case of manufacturer’s defect – is now mostly gone. Allowing me to exchange a 2 month old item at the store was “an exception”.
….by the late twentieth century a powerful evolutionary dynamic had evolved from technological advances discovered by Homo Sapiens that created a distinct class morphology as manifested during the following century by the appearance of several subspecies, most notably ssp Digitalis, ssp Decrepitus, ssp Sociomaximus and several other highly exotic variants. At the very climax of this diversity, a surviving member of ssp Boomeratus unwittingly plugged an outdated X-box into the refrigeration module of his kitchen zone cubicle distributor, subsequent events being so well recorded and widely documented elsewhere that further elaboration would now be pointless.
Tire treads along the borders of my phone as I scroll down, courtesy of the Honda HR-V ad, with a rolling ad over the comment box as you comment. That is new.
I use the Apple store as my most optimistic barometer for our mall. I went there on Monday at noon. It was almost empty except for black To shirt employees. The mall was deserted. I bought a pretzel to remember the good ole times. This is bad news.
Brick & mortar retail shopping is now more of an event rather than something done in the course of routine. Of course there are just some things I just have to see, feel & try on first such as clothes & shoes. I’ve never had success buying shoes or most clothing online. Furniture. I want to touch it, sit on it, make sure it works for me before I buy it. There will also always be a need for retail stuff you just need right now, not tomorrow. Something for the house – Home Depot or Lowes. Something for the cars – the local auto parts store. A shirt, a pair of pants – Kohls.
Humpty Dumpty comes to mind, the retail bricks fell off the wall, and gubmint couldn’t put them back together again, largely were talking corporate-welfare here, where BIG companys through lobbying destroyed the small retailer.
Much of the same has happened in Aviation, where now last man standing is Boeing, which was usurped by the GOV back when they were moved to Chicago, and now GOV(CIA-NSA) has destroyed a perfectly good brand.
* Much the same is happening right now, PTB are working over-time in denial-denial to say that the sky ain’t falling.
Ethopia say’s we MUST send the block-box to UK, as USA not be trusted
Think about this it was SERCO-GROUP (RCA-UK) that developed the Boeing Uninterruptible Auto Pilot (BUAP), when Boeing moved from Seattle to Chicago, CIA/NSA took the pilot out of the loop and put BUAP in the loop.
The 737-max8 is an unstable aircraft because of moving the engine forward, the plane needs ‘human pilots’ to fly, the software for BUAP is now 10+ years old and it can’t fly the 737-max8 on take-off.
Serco also owns (ABC-Media-Ltd UK), funny they own zerohedge.
RCA-UK ( predecessor to Serco ) was the main supplier of high-tech to the rising Nazi’s in 1920’s, funniest of all is that the Bush family was the major share-holder and assisted the German banks with financing.
Summary? Nothing is what it appears, and all your News has 3+ layers of denial-denial.
Good News is that the AI, e.g. pilot-less plane plan of the elite and pilot-less car’s, … are going off the tracks.
* Retail? Same it will return to “LOCAL”, because the National/Global brands are Poison and/or Crap.
Ethiopia is sending the ‘black box’ to France.
The real issue is that the giant indoor mall format just doesn’t work anymore. No one likes it. Too much walking. The parking lots are too big. Etc. It isn’t enjoyable anymore to go to a mall.
Outdoor malls and strip malls are much more efficient for “brick and mortar” shoppers. And yes, TJ Maxx and other growth brick and mortar stores are in these formats—not giant indoor malls from the 80’s.
“The parking lots are too big.”
… and the slots are too small. Parking lots don’t make any money–they’re free at malls–and the spaces are designed for the small sedans of the 70s and 80s, not the gargantuan SUVs of today, which all but guarantees a door ding or two every time you park in one.
If no one’s shopping at the mall, it’s easy enough to park in 2 spaces. No risk of dings.
If you’re in danger of dings then obviously the mall isn’t suffering much risk of going out of business.
The volume isn’t the issue, IMO. The issue is online shopping picking off the highest margin items, much like FedEx and UPS picked off the most profitable sections of mail transport.
Even today after the growth of online shopping/delivery, the USPS revenue is on our with UPS.
Who cares?
Small shops etc where all destroyed by Mega Malls.
Mega Malls destroyed by E Click shopping via free shit, shipping.
E Click destroyed by Greed and Debt dead unemployed zombies.
Forget learning to code. Just Fake it like a journalist.
We are silly spoiled children. Peer-to-peer retail is idiocy as we approach the peak oil induced Depression. Makes sense to deliver electronic data directly to its destination, but not heavy bulk goods. Folks will always need to drive out for food and fuel. That is when they will shop for goods. Not waiting bored for Fedex
Sorry, but food shopping and goods shopping is completely different and not really mixed.
the malls are dying because of the LBO’s of retailers. the companies that went bankrupt were pillaged by corporate raiders (which they have the right to do but let’s call a spade a spade), expamples, Sears, Payless (bankutcy twice), toy r us… etc.
In Holland all the LBO retailers went tits-up around 2016, it is now time for the none LBO’s to do their last dance. So no i don’t think it is the LBO’s that are causing the malls problems.
E-Commerce as I see it is another economic evolution that occurs over time. All those brick and mortar stores have large amounts of inventory and it must be turned over 5-6 times a year to make profits. That is why you only see items that move from the shelves. E-Commerce can limit inventory to less locations as in distribution facilities and turn inventory more often and they also do not need as many employees. They can offer lower prices because their costs are lower.
For the consumer, why drive to a store to discover what you want is not stocked and then have to go to another store. Time is valuable and one can find what they want online in less time and then its delivered to your home. You also save on transportation costs (car).
Brick and Mortar will not recover from the economics and those stores who do not move also to e-commerce will left by the wayside.
I like Wisdom Seeker’s idea for a retailer alliance and think we should work on it.
We can call it the Retailers Mutual Benefit Assoc and having all the information about pricing and inventories we can approach Wall St for some near zero interest money to start buying up the best locations and even though we lose money on every sale we’ll gain market share and eventually have our own store brand let’s call it Orwell’s that will drive all competition out of business so we can raise prices but earning money is a lot of work and takes time so we can do an LBO and pay ourselves a special dividend and then move all the valuable real estate into a separate holding company and lease back to stores and keep loading them up with debt to buy back stock to make our options more valuable until the whole thing collapses under the debt.
Frankly am surprised no one thought of this before.
“I like Wisdom Seeker’s idea for a retailer alliance and think we should work on it….Frankly am surprised no one thought of this before.”
–i KNOW! it’s a bad ass idea…indie, creative, useful and defiant… THIS is why i love this place.
I insist my reaction is wanting to preserve our civilization.
Let the “multiculturalists” harp on about “racism” and all the rest of their catechism.
Wolf has detailed the fall and decline of Sears many times here on this site.
A part of these brick and mortar sales is even facilitated by e-commerce.
People searching through the internet, comparing prices and making the purchase in the physical store if convenient to avoid shipping charges.
I’ve been hearing about the death of malls for at least 15 years…and i believe and see it…but Simon. Properties has been a stallion since the march 2009 lows….I never could figger that one out…could u? I go to a mall anchored by Neiman Marcus and Norstroms in White Plains, NY…it’s dead as a door nail during the week…the weekend. sees a little action…
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they just spent a few mill doing over the food court–with more upscale vendors…that’s a ghost town…why are these vendors signing expensive leases and putting in expensive set ups???
Everyone wants to blame the mall concept as being outdated etc. The problem with most mall stores like Macy’s whoever is a complete lack of service and organization, lower and lower quality of clothing/products and very few destination reasons to even go to a mall anymore. All the hot new foodie/restaurants are not in malls. Why not? What things for families or kids really exist in malls anymore besides the one dirty little community play area or outdated quarter rides. Here in Minnesota there is HUGE potential to turn these malls into mega family centers with indoor playgrounds, indoor kids pools, etc. If these companies like Macy’s etc. were smart they’d get together and pool their money and resources together and start reinventing the mall wheel. Mall of America but in a much smaller and more affordable and manageable schedule. Malls need to get away from this dinosaur concept that people are going there to “buy” stuff. Revive the concept that people are going to want to go there to spend a day having fun, trying to things aka restaurants, new experiences etc. I’m telling you anything where kids and moms and go and spend a day or half a day playing, entertaining etc. is what people want and NO amount of online E-commerce can compete with that. There is a huge need for this type of place in the long winters here in Minnesota and the only one addressing this is communities who are investing in beautiful, fun, indoor playgrounds and pools and other amenities. If the private retail sector was smart they’d get in on this trend.
You have all seen the ad for Carvana where you can buy a car online and they drop it off to your home or you pick it up from one of their vending machines (it doesn’t quite drop like a bag of chips but a platform lowers it from a multi-story glass tower). Just saw an ad from them last night promoting that they will buy your car and pick it up from you. The do the title, financing etc and now that Tesla is getting out of brick and mortar… PS – guy who does Bain auto consulting says by 2025 annual new car volume will be at 11.5mm units. 2018 was a hair below 17 mm. More electric cars, less gas stations needed.
New airline called Moxy from the founder of JetBlue. Completely app driven, no one to talk to, e-airline launching next year. Reservations, baggage everything does via app.
People won’t be buying that many cars, whether online or offline.
In case anyone missed it, e-commerce happens to be another nail in coffin for private ownership of vehicles.
The growing trend for online purchases and negligible cost of delivery, will also drive the trend for LESS utility in private vehicle ownership (unless you live in some distant woodlands or suburbs).
I used to drive EVERYWHERE to get small stuff or buy take-out from some mall or drive back and forth whenever I forget to pick up an item or two.
Now, where I live, I can easily call the delivery guys for food, Uber for rides even Uber for some bulky deliveries. A few of my neighbors do groceries via online deliveries too; but me personally, for some atavistic reason, I still like to fondle my fruits & fish before I buy them.
Even so, my mileage on my vehicle now is like minuscule compared to the days when my very first online purchase (for an axe) was done via a 64k modem. lol.
I really feel like its a big waste now when my shiny vehicle sits parked ad languishing most of the time.
Maybe I’ll give up on cars when someone does a remote / VR system for grocery shopping coupled with same-day drone deliveries?
Fact is worldwide, more people are gathering within the cities for jobs, for convenience, amenities and so on. If you live in the city, it makes less and less economic sense to spend your money on a shiny private vehicle that you hardly use.
I also noticed younger folks now don’t ascribe private vehicle ownership as a sign of achievement, like they once did in the past.
There is less “snob” value with having a private vehicle now, right after Uber/Lyft came into market.
Then, when Tesla arrived with its very quiet and refined electric drive train, it was even more of a killjoy for the typical noisy combustion engines.
I mean one of the reasons why douchebags buy expensive sports cars is precisely because the NOISE revving it attracts attention. The louder it is, the better for some male egos.
So, in a future world where quiet EVs become the norm, the noisy engine growl might become synonymous with the uncouth and the unsophisticated?
Perhaps, that is a good social thing happening here… less noise pollution in the city streets too. Less snobbery, less fossil fuel pollution.
I’m beginning to like this Brace New World already. :)
The exponential growth trends in things like e-commerce don’t make sense to me. It’s been a while now since everybody has become a regular user of smartphones and facebook, and whoever hasn’t converted by now is probably unlikely to change their mind in the future. So what is driving the growth? How can people increase their online purchases at such an orderly and predictable rate?
Future Historian,
“How can people increase their online purchases at such an orderly and predictable rate?”
By shifting their purchases from brick-and-mortar locations to online.
Two factors: 1. more and more people are going online to buy; and 2. each one of them buys more things online.
Each year, more people are buying online, and each of them is buying more stuff. At first it was just books. Now it’s dishwashers, couches, bottled water, music, videos, engine parts for a car….
The growth of online sales will slow when there isn’t much brick-and-mortar left, and when no one is left to switch over to online. It has taken two decades so far, and my guess is it’s going to take a decade or two to finish the job.
Two places I never go that I used to go to all the time as a kid:
1. Malls
2. The movies
Love Amazon
Many have noticed selection is way down to cut inventory to cut cost. It is a pain to go to big box home diy retailer and quite often they don’t have what you need. It is circular destruction.
Evolve or die, every business faces this throughout mankind’s history
Now I’m confused–I thought it was PE and hedge funds giving the coup de grâce to brick and mortar.
Wolf, What we all just need to do is realize a simple fact. Robots don’t eat, nor do they sleep. Robots don’t require govt subsidized housing either. And Robots are so Green. They seemingly don’t pollute. But, if they don’t figure out how to make Robots spend money, then the golden goose of e-commerce is going to consume itself as, there will only be e-commerce type folks in the world, and not many folks left who do all of the other things needed for a society. We are going to learn what, Just-in-time inventories mean without a populace. It will become Just-went-defunct. I don’t think I overstate this. Just as there is not enough energy in the world to make everyone a solar panel…….we are making ourselves extinct via greed. Ocasio will not need to wait 12 years.