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  • Retail Apocalypse

    So I was in a consignment furniture place yesterday looking for a couple of pieces for a bedroom renovation we are doing. I had quite an interesting conversation with the owner. She also owns a high-end apparel resale shop just next door and has been in business for over 30 years.

    I asked her how business was, and she just shrugged her shoulders and said "we are barely hanging on, but it was a good business for us for many years." Of course, online purchasing is negatively affecting her, but she explained that from her vantage point, the 30-somethings and younger (I'll just term that segment "new generation" for the purpose of discussion) are a completely different culture, with different values, and it is having a profound impact on retail anywhere. A few morsels that she offered:

    - Yes, they want to buy cheap, so they buy online
    - But they will often even spend MORE to shop online, because they don't desire any human interaction. They want "keyboard communication" and that's it. They avoid verbal dialogue with real people, and you have to do that when shopping locally.
    - They are minimalists, which is fine.
    - But not only are they minimalists, they buy cheap stuff. Clothing, for example, the new generation looks at as throw-away. You wear it one season, you throw it away. Shops such as Forever 21 are all the rage because 1) the clothing is cheap, and 2) it's throw-away. Come back next year for new outfits.
    - They buy the cheapest furniture they can get their hands on. Again, it's throw-away. There is no such thing as an heirloom piece. A nice clock or fine antique table. Get new and get it cheap.

    As I began thinking on my way home, I realized all of the empty retail space in our town now. Sears, Mervyn's, Radio Shack, Payless Shoes, Toys R Us, bookstores, electronics stores, furniture galleries -- gone. Incredibly, these casualties have happened during one of the biggest economic expansions in U.S. history!

    The affect on local economies is significant - both in lost jobs and lost sales tax receipts that pay for schools, police, and firefighters.

    In the year 2025, I can see the following closures: JC Penney, Bealls, Best Buy, Barnes & Noble, Havertys, various sports wear outfitters, Office Max/Office Depot. Wal-Mart will hang on, but there will be fewer of them. In the next recession, I can see the luxury car makers getting hit very hard. Mercedes, BMW, Rover, Volvo, Jaguar, Audi. I look for fewer of these brands to be available.

    The next recession will ramp up the blood-letting of retail by a multiple, and it is going to affect all of our communities in profound ways.
    How can you have any pudding if you don't eat your meat?

  • #2
    Originally posted by TexasHusker View Post
    she explained that from her vantage point, the 30-somethings and younger (I'll just term that segment "new generation" for the purpose of discussion) are a completely different culture, with different values, and it is having a profound impact on retail anywhere. A few morsels that she offered:

    - Yes, they want to buy cheap, so they buy online
    - But they will often even spend MORE to shop online, because they don't desire any human interaction. They want "keyboard communication" and that's it. They avoid verbal dialogue with real people, and you have to do that when shopping locally.
    - They are minimalists, which is fine.
    - But not only are they minimalists, they buy cheap stuff. Clothing, for example, the new generation looks at as throw-away. You wear it one season, you throw it away. Shops such as Forever 21 are all the rage because 1) the clothing is cheap, and 2) it's throw-away. Come back next year for new outfits.
    - They buy the cheapest furniture they can get their hands on. Again, it's throw-away. There is no such thing as an heirloom piece. A nice clock or fine antique table. Get new and get it cheap.
    A. I don't think all of this is entirely a new phenomenon
    B. I don't think all of this is confined to the under-30 crowd

    When I was in that age group, I also bought the cheapest stuff I could find. Why? Because I didn't have much money. I was a student living on student loans. After that, I was busy repaying those loans for 12 years. I had furniture that was hand-me-downs from family. I had furniture that was trash-picked. And I had a few low end new pieces that mostly came from Ikea or other assemble-it-yourself kits from K-mart or somewhere similar. Nobody my age was out buying heirlooms and antiques.

    Online wasn't a thing when I was in that age group, so I can't speak to that, but I can certainly relate today even though I'm now almost 55. Just today, I went to a supermarket that I don't normally shop in and I was annoyed that they don't have any self checkout lanes. I was only buying 2 items and didn't want to have to stand in line and deal with a cashier when I could have gotten in and out much faster with self checkout.

    As for places like Walmart surviving, I think you're right but I suspect we're going to see them build more smaller stores and fewer massive ones. Why? Because more and more people are shopping from Walmart but doing so by ordering online and just driving over to pick up their order. And depending on what you buy, there can even be no human interaction involved in that entire process. We bought something from Walmart online last week and picked it up at the store where they have an automated locker system for pickup. You just scan the bar code on your phone and a locker automatically pops open with your items. You take them and are on your way.

    My wife shops at JoAnn Fabric a lot but just yesterday placed an online order for in-store pickup. She just walked in to the cashier and picked up her order. It was already paid for so she was in and out in probably 3 minutes.

    I think the "order online, pick up in store" is helping physical stores compete with online-only retailers like Amazon. But you're absolutely right that there is a huge amount of vacant retail space today because we have learned that we don't need physical stores to buy most things. Plus, without physical stores to maintain, online retailers can have lower prices. I do all of my banking and investing online too. Our checking account is with a physical bank but I only step into a branch maybe once a year if that. Our mortgage was handled entirely online except for closing which literally took place at our kitchen table and took all of about 15 minutes.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


    • #3
      There is a mart near us that has been there for probably 75 years. It is the sort of place with stalls (for lack of a better term) each occupied by a different business. Anything from books to jewelry to hardware to food to vitamins to pets. But the occupants have definitely changed, especially over the past few years. I was there today. Where there used to be all retailers and food service, there are now stalls occupied by a solar panel firm, a basement waterproofing company, 2 bathroom remodelers, one kitchen cabinet place, a tax preparer, and at least a couple of other non-retailers. Almost every stall is occupied and the place was busy so they seem to be doing okay, though I have no idea how the individual businesses are doing.

      One local traditional mall had about half of it torn down a number of years ago. In the half that remains, many of the stores are vacant and many others have been taken over by non-retailers: karate school, fitness center, day spa, several medical offices, and a few township offices including the municipal court.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


      • #4
        It is said that "Millennials" value experiences over things. That's probably true, but as a Boomer, my wife and I have become very much the same way. For probably 15-20 years after we were married, we were all about acquiring stuff, both practical items like good kitchen items, nicer towels, furniture, etc., as well as building a huge collection of Disney memorabilia and other non-necessary items. In recent years, though, we've gradually been liquidating a lot of the "stuff" and definitely focusing more on doing things rather than getting things. So travel, going to the theater, hitting tourist attractions, trying new restaurants, and things of that nature are where much more of our discretionary spending goes today. Very little retail shopping beyond necessities.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

        Comment


        • #5
          Interesting post and I think you have a lot of good points. We often go through antique malls and thrift shops and are astounded at how many sets of dishes are there for little to nothing. Same thing with furniture. I understand Disney Steve's comment about buying cheap stuff because he didn't have any money when he was younger, but I don't think that is entirely the issue. I think society as a whole has embraced the disposable life style in many areas. We use cloth napkins. I started using them years ago because I wanted to save money. Some I bought new, many used, some I made. I launder them when I wash other stuff so it's no big thing. There are some I have to iron so I only use them for special occasions. But, how many people use cloth napkins daily? Anyway, that's my example. We have nice furniture and we enjoy it, but that's our priority. My folks had a furniture store when I was growing up in addition to my dad working another job.

          A friend's brother runs a resale shop and he said locally everyone is hurting because no one seems to be buying used furniture anymore, at least not enough to keep them all going. He said that most are buying the stuff online that is cheap and convenient.

          Comment


          • #6
            I like to buy stuff that I will have from now on. Back in 2004, our roof got hailed out - the third time in eight years. So I decided I would install a slate roof. I had 36,000 pounds of slate in wood cartons delivered to my house and sitting in my front circle drive. The neighbors were all "hee haw" ing about what a fool I was for spending all that extra money - at the time about $45,000. But the look was incredible and I knew that I would never live to have to replace that roof. Fast forward 15 years, and most of my neighbors have replaced their roofs at least twice, some thrice, and I've never lost so much as a shingle. And my house stands apart from the rest because I have a slate roof - the replacement cost nowadays is well in excess of $100,000.

            Did I come out on it economically? I don't know. But I know that will never have to replace the roof. Quality matters to me.

            "The bitterness of poor quality will be remembered long after the sweetness of a cheap price is forgotten." - Benjamin Franklin
            Last edited by TexasHusker; 08-14-2019, 12:56 PM.
            How can you have any pudding if you don't eat your meat?

            Comment


            • #7
              Originally posted by TexasHusker View Post
              I like to buy stuff that I will have from now on.
              Sure, but that doesn't rule out cheap stuff. We have Ikea furniture that I bought for my first apartment in 1986. I took it to my 2nd apartment, and then the house we rented when we first got married, and finally to the house we bought in 1994. Now those items are over 30 years old and still in use. Cheap doesn't always mean crappy or short-lived.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


              • #8
                Originally posted by disneysteve View Post

                Sure, but that doesn't rule out cheap stuff. We have Ikea furniture that I bought for my first apartment in 1986. I took it to my 2nd apartment, and then the house we rented when we first got married, and finally to the house we bought in 1994. Now those items are over 30 years old and still in use. Cheap doesn't always mean crappy or short-lived.
                This post is worthless without pictures
                How can you have any pudding if you don't eat your meat?

                Comment


                • #9
                  Those of us that sell online are running into things that even 10 years ago we weren't having much of a problem with and for sure when I first started selling online we didn't have that problem. Many of the Amazon sellers feel that the 'new generation' wants everything fast and cheap. Someone mentioned in a thread last night that they had gotten feedback where they said it took a couple of days longer than they expected to receive it. The seller could tell from USPS tracking that it reached them in 2 days! How does that equate with longer than expected? Also many, and I'm not talking scammers here, seem to take no responsibility for their own goofs and don't to pay for them. I had a buyer the other day claim that I sold something that was 'inaccurate website description'. She had bought a pattern for maternity pants and leggings which the title had stated as well as the product description. Nothing said anywhere about the tops. The picture of the front of the pattern showed the women wearing maternity tops, as most all sewing pattern has the models wearing tops for pants and skirt patterns. This buyer had only looked at the photo and not anything else. I refunded her, less the shipping cost both directions. Same with buyers that somehow bought two of the same thing and then want a refund as if it was my fault. Had one last year that bought a Vogue pattern for $25 and then returned it as she 'didn't know it was a pattern, thought it was a garment' even though listed as a sewing pattern. I looked online to see if you could find the garment and did and it was priced at $2500! And she thought she was getting that for the price of the pattern and said it didn't say on the listing that it was a pattern even though it did. The list goes on. They complain that the listing is in error as that means that they think they get all their money returned including shipping. If I goofed I I do whatever I can to correct the error, but I refuse to take responsibility for these peoples lack of reading and reading comprehension nor will I eat the cost of the shipping both ways. I do this to help make ends meet not to fork out ~$8 on shipping on something I don't make even a penny on. The new generation seems to be shopping more online, but they expect sellers to have ESP as to what the buyer really wants. Like when they buy a sewing pattern for pajamas that includes boys size 2 all the way up to men's size 48, with a list of different fabrics the could be made with. The buyer was mad because he didn't get a pair of PJs. Yet he hadn't mentioned the size he needed, the fabric he wanted and of the garments shown on the front of the envelope, the color he wanted! How would he expect to receive a pair of PJs his size in the color he wanted and in say flannel instead of summer-weight cotton? Drives me nuts! Even worse for other sellers who deal daily with this sort of nonsense.

                  I do admit to doing most of my shopping, other than for groceries, online as it is so hard for me to shop in retail stores as many don't have electric wheelchairs and I can no longer walk around for more than 1-2 minutes. I do manage to get into small thrift stores and find some great things. I love going to B&N when I can. My friend that takes me for my IV is happy to stop so I can get the current magazines that I follow. Other than than, nope, I don't get to go shopping and much of what I do, I need help with it. Buying online is wonderful for the disabled. Although it is sad to see the giants go. It seems that somehow there should be a happy medium. I know though, that for most of my life, stores like Penny's and Sears were out of my price range to shop there and when I did, I tried to get items on sale.
                  Gailete
                  http://www.MoonwishesSewingandCrafts.com

                  Comment


                  • #10
                    this is why retail has adjusted their models to have fewer people to service you. It's why places are half staffed, if that. automated kiosks, etc. I think it'll be a slow blood letting, and get worse in the next recession.

                    brick and mortar retail is going to need to change to survive. a lot of companies, such as walmart and best buy have adjusted their strategies to incorporate their store locations into assisting their online operations.

                    Comment


                    • #11
                      Originally posted by ~bs View Post
                      this is why retail has adjusted their models to have fewer people to service you. It's why places are half staffed, if that. automated kiosks, etc. I think it'll be a slow blood letting, and get worse in the next recession.

                      brick and mortar retail is going to need to change to survive. a lot of companies, such as walmart and best buy have adjusted their strategies to incorporate their store locations into assisting their online operations.
                      Another problem which is harder to fix is that the big box stores are just way too big for what they need. Walmart has started addressing this with their Neighborhood Market stores. Target has also started opening smaller footprint stores. There is one not far from us. It has all of the basics but not everything you will find at a typical Super Target.

                      Walmart in particular has also gotten big into the shop online and pick up in store strategy.

                      At least in this part of the country (mid Atlantic area: PA, NJ, NY, DE) there is simply outrageously too much physical retail space and has been for years and they're still building more despite what is clearly happening in the retail sector. I've never quite understood it.
                      Steve

                      * Despite the high cost of living, it remains very popular.
                      * Why should I pay for my daughter's education when she already knows everything?
                      * There are no shortcuts to anywhere worth going.

                      Comment


                      • #12
                        Originally posted by disneysteve View Post

                        Another problem which is harder to fix is that the big box stores are just way too big for what they need. Walmart has started addressing this with their Neighborhood Market stores. Target has also started opening smaller footprint stores. There is one not far from us. It has all of the basics but not everything you will find at a typical Super Target.

                        Walmart in particular has also gotten big into the shop online and pick up in store strategy.

                        At least in this part of the country (mid Atlantic area: PA, NJ, NY, DE) there is simply outrageously too much physical retail space and has been for years and they're still building more despite what is clearly happening in the retail sector. I've never quite understood it.
                        Around here, commercial office space also has a lot of vacancies. Several office buildings have decided to turn their prime commercial locations or shopping areas into residential condos or student dorms. Perhaps something like that would end up happening to retail space where a portion of the mall area is going to be housing.

                        Comment


                        • #13
                          Originally posted by ~bs View Post

                          Around here, commercial office space also has a lot of vacancies. Several office buildings have decided to turn their prime commercial locations or shopping areas into residential condos or student dorms. Perhaps something like that would end up happening to retail space where a portion of the mall area is going to be housing.
                          One mall near us now has several medical offices, a karate studio, a fitness center, and the county offices including the courthouse. Another has a small church, and I think one is using space in a vacant anchor store location for college classes. There are millions of square feet of former retail space across the country getting repurposed. I read about one mall that converted the upper floor to condos.
                          Steve

                          * Despite the high cost of living, it remains very popular.
                          * Why should I pay for my daughter's education when she already knows everything?
                          * There are no shortcuts to anywhere worth going.

                          Comment


                          • #14
                            Originally posted by disneysteve View Post

                            One mall near us now has several medical offices, a karate studio, a fitness center, and the county offices including the courthouse. Another has a small church, and I think one is using space in a vacant anchor store location for college classes. There are millions of square feet of former retail space across the country getting repurposed. I read about one mall that converted the upper floor to condos.
                            repurposing is way better than leaving vacant. also, having different businesses in there, even churches or student classes also helps the other businesses in the mall area just because of the extra foot traffic.

                            Comment


                            • #15
                              Originally posted by ~bs View Post

                              repurposing is way better than leaving vacant. also, having different businesses in there, even churches or student classes also helps the other businesses in the mall area just because of the extra foot traffic.
                              Definitely better all around than a bunch of vacant space decaying and inviting vandals. Retail space was just so outrageously overbuilt because I guess they just never imagined a time when it wouldn't be the way to go.
                              Steve

                              * Despite the high cost of living, it remains very popular.
                              * Why should I pay for my daughter's education when she already knows everything?
                              * There are no shortcuts to anywhere worth going.

                              Comment

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