The New Age of Retail
by Sean Lee on August 5th, 2007
As a long time retailer I have watched the big-box, category killer retailers grow by leaps and bounds to dominate all markets. They have experienced double digit sales increases year over year and crushed their weaker competition through efficient marketing and distribution systems. In doing this they have validated the capitalist system of market efficiency. With their success came a reduction in the choice of products available as they gave you the best price, on a particular function, while deserting the entire fringe product. Thus they were able to gain great return per square foot of selling area. In the early eighties we saw the emergence of Home Depot, Best Buy and other category killers who took advantage of the lack of choice at the discount and department stores to offer expanded products in categories. Then they drove manufacturers and suppliers off shore in an effort to ratchet down prices while reducing the assortment. Since the smaller competition was eliminated, they could do as they pleased. As they continued to grow unchecked, problems began to appear. Consumers began to notice the lack of selection, poor service, and the destructive impacts big box retailers have on local communities. For the first time this past December both Wal-Mart and Home Depot suffered comparable store decreases in sales. And this, I say, poses a tremendous opportunity for all of us.
I like to occasionally recommend books and articles that I feel are important, and one that I would like to recommend is "The Long Tail", written by Chris Anderson, editor of Wired Magazine. It tells why the future of retailing is selling less of more. This book is an absolute must-read for any retailer.
At one time every town had, at its core, doctors, lawyers, engineers and Main Street merchants. Main Street is now littered with "For Lease" signs in deserted storefronts where beloved independent merchants once thrived. Wal-Mart and Home Depot have brought you an array of disposable, import product at low prices, but at what cost?
Join us as we usher in a new Age of Retail, and I sincerely wish you success in all of your endeavors.