retail news in context, analysis with attitude

This commentary is available in text and video form. The content is similar, but not word-for-word. Enjoy both, or either...

Hi, I’m Kevin Coupe and this is FaceTime with the Content Guy.

A couple of folks in the MNB community sent me a commentary that appeared on a website called InvestorPlace.com, under the headline, “The End of the Big-Box Era.”

The story starts out by saying that “a funny thing happened” on the road to the 2010 and 2011 retail recovery: “Big-box retailers didn’t pull out of their nosedive. More casualties are on the way, and unfortunately — not to mention needlessly, in many cases — these retailers are powerless to prevent their own demise.”

There are a lot of names mentioned in this story, like Sears, Lowe’s, Borders, Linens ‘n Things and - no surprise - Best Buy. The story also suggests that Walmart’s recent same-store sales doldrums can be attributed to the same sort of problems that have plagued other big box companies.

Here’s how the story assesses those problems:

“What’s causing the mass extermination of big-box retailers is that they’re big-box retailers, with all the drawbacks and vulnerabilities thereof. These drawbacks and vulnerabilities include (1) poor in-store service, (2) not being price-competitive with the Web, and (3) not recognizing that drawing a spending crowd is as much about entertaining shoppers as it is about selling compelling merchandise ... Oh, sure, it worked until a few years ago because to buy something, you essentially had to go to a retail locale. That made retailers arrogant, thinking it was their special skill, quality of sales training, or knowledge of the customer that drew a crowd.

“Surprise! It wasn’t.

“As it turns out, Sears is boring. Dillard’s isn’t selling the hottest fashions. Shoppers may know more about the technology they’re looking to buy than most Best Buy employees do. These retailers did reasonably well through the early 2000s mainly because shoppers had little choice but to go to those places if they wanted to buy something.”

The thing is, these criticisms can be leveled at more than just big box stores. Any retailer - big or small, chain or independent, upscale, mainstream or value-driven - that has not worked overtime at creating a compelling, transparent and effective store experience simply may not have any reason to exist.

Let’s go back to the InvestorPlace commentary...

“Consumers want to be dazzled by something they can’t get via their smartphone. Store employees can’t be insulting or annoying anymore — everyone knows those extended warranties are worthless. Retailers can’t count on being a price leader any longer, either, since everybody price-matches. Sadly, most of these big-box names will probably never get it. As such, they can make for poor investments, struggling to just survive. Many of them won’t even do that.

“It really is a new era in consumerism.”

Boy, do I believe that.

That’s what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

KC's View: