Retail is Chasing it’s Tail

It’s that time again.  Time for another baseless, highly uninformed, talking-out-of-my-ass opinion.  Today’s topic?  The state of affairs in the traditional “brick and mortar” retail business model.  Specifically, whether said business model simply needs an overhaul, or needs to be “old Yeller’ed.”  Taken out back and shot like a rabid dog.

Game Stop announced that it would be shutting down 250 stores in 2013.  Best Buy closed 50 stores in 2012, their stock down a whopping 94% from the previous year.  Sears has closed, or is in the process of closing 100 to 120 stores, K-mart closing 26.  Zellers stock dropped by close to 100% in the past year, it’s last gasping breath was punctuated by a large Target logo, who bought them lock, stock and barrel in 2012.  In addition to these tragic downfalls, I would also like a brief moment of silence for the following fallen:  A&B sound, CompuSmart, Radio Shack, Blockbuster, and Rogers video.  Cue the “Runaway Train” music.
Does this mean that retail all over the world is crashing, I mean, the world economy has gone to shit, we all know that.  Surely that is to blame.  Not so fast hot shot.  If you do some snooping around you will find that businesses like Safeway, Loblaws, Shell, Bell, and Rogers are showing year after year growth, it’s business as usual.  The difference of course is that all these companies provide what would be classified as essential services, food, clothing, gas, phones, things of that nature.  They can pretty much continue business are usual, people won’t simply stop buying food anytime soon.

The first list of companies however, sell commodities, non-essentials, luxury items.  Almost all of them involved in technology in some form or another.  you can blame a depressed economy all you like, but I’m here to tell you that is not the case.  The reason for all these failures is not unlike the recording industry trying to sue a 7 year old for piracy.  It’s the inability to cope with and adjust to the changing landscape modern business.  it’s a sad, sad downward spiral.  Sales start to get soft, so they start to cut corners.  First and foremost companies will cut payroll.  They do this mainly because it’s a really easy stop-gap.  It requires minimal effort to do, and saves a ton of money.  Now all their stores are understaffed, and all the staff that survived end up doing the job of two or even three people for the same or less pay.  They get surely, disgruntled, and unhelpful.  It becomes a terrible experience to go shopping, and sales get softer.  Now the company starts cutting stock.  That saves a few bucks on purchasing, but now someone walks into the store and there is sweet fuck all to buy, everything is a special order.  Well, if I’m gonna order it anyways, why don’t I just cut out the middle-man and order it myself from the comfort of my home?  Sales start to get even softer, and the company starts closing stores.  Eventually they just fade away, all the time wondering what went wrong, blaming everyone except themselves.

Here’s the thing, a store like Best Buy is commonly known as the “Amazon show room.”  People go to the store to shop for products, find what they like and then go home and buy it online.  Now why do they do this?  Is it really because it’s 5 bucks cheaper?  No, it’s because it’s pretty much the same experience either way.  That is, you are going to be helping yourself.  You won’t be getting any sort of meaningful help from anybody, remember those payroll cuts?  How many times have you found yourself wandering around a store, craning your neck over the shelves fruitlessly searching for non-existent, unhelpful staff.
When is the last time you walked out of a retail outlet of any kind, feeling like you actually had a good time shopping there?  It happens from time to time, but the majority of retail experiences these days go like this:
You walk into Bob’s Thing-a-ma-Bob’s.  You either get ignored completely, or get a half-hearted, distracted greeting from someone who would rather be literally anywhere other than here.  You walk over to the widget section display.  You find that the display is dirty, and in complete disarray.  There is ten slots for different widget display models, five of them are empty, and of the five full ones, three of the display models don’t work.  You keep moving to the widget accessories section, right beside the sorry displays.  Half of the accessory pegs are empty, most have the incorrect price, or no price at all.  You don’t see the model you are looking for, so you begin the epic quest of finding a staff member.  If you find one, you have to be quick, because chances are they have three different jobs to do all at once, and they are scurrying like crazy.  You finally manage to snag someone, they look up the model you are looking for, they don’t have any.  So you ask about the model that they do have, one that is similar to the one you want.  They can’t tell you anything about it that you couldn’t find within 30 second on your smart phone.  You say screw it, go home, and order it online.  Bob’s Thing-a-ma-bobs gets one step closer to the grave. 
Now, when I was a retail manager I had a saying, “don’t come to me with problems, come to me with solutions.”

What I meant by that was, any of my staff could come to me to complain about a problem they were having, as long as they brought with them a few possible solutions to said problems.  It insured that my staff weren't bitching for the sake of it, and it encouraged problem solving and critical thought.
So, I have to abide by my own rules here.  I need to come up with a possible solution to the sorry state of retail.  Given all the changes in the way people shop today, retail needs to adjust to stay relevant.  They need to offer something that cannot be experienced with online shopping.  Simply having the lowest possible price is not the answer.  If you try to engage in a price war with a website you will lose, as Best Buy is going to find out soon enough since they started price matching websites.  The brick and mortar experience needs to transform into the “premium” version of shopping.  It needs to be great.  Lots of selection, neat, tidy, clean stores with an abundance of well paid, well trained staff.  If you talk to any retail executive today, or believe the commercials on the ol’ TeeVee, you’ll find the claim that their business is exactly that.  They will beak about striving for excellence and all that crap.  There is a colossal difference between talking the talk, and walking the walk, and I have yet to see too many businesses walk that walk, from the inside as a manager, or as a customer.

I will leave you with one great example of a business that “gets it.”  I fully endorse this company for what it’s worth.  That company is Memory Express.  They sell technology, computer parts, TV’s, cameras, laptops, tablets, etc.  Now you can get that kind of crap just about anywhere.  Amazon, Newegg, and NCIX come to mind.  In a way they are direct competitors, these websites all sell the same stuff Memory Express does, and usually for just a little bit cheaper.  Here’s the thing, every time I walk out of Memory Express, I feel good, even if I didn’t get anything.  I feel good because they do all the things I talked about, they walk the walk.  The staff are plentiful and knowledgeable, not hurried or stressed, even though they are very busy.  Everything is neat and orderly, and they actually have lots of stuff in stock.  For that, I am perfectly willing to pay 5 extra bucks for a video card.

Obviously there is still a place in this world for businesses like Wal-mart, where it’s expected that corners are cut for the sake of lower prices.  Employee treatment not withstanding, but if all you sell is non-essential, specialized, products, you’d better step your damn game up, or it’s just a matter of time…..old Yeller…..

-jer