Choppy waters in retail sea change

Choppy waters in retail sea change

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There was confirmation for what I have been saying over the past couple of years. Shopping has changed. Now I have never been a particularly astute shopper. When I need something, I go into the closest appropriate store and buy the item. The only time I enjoy shopping, for the most part, is when I am on vacation and feel I have the leisure to browse. Especially if I am in a foreign country, shops are a place where the clerk probably speaks English and will be inclined to chat, hoping for a sale. That way I learn about the place I am visiting and also perhaps see unusual products that may tempt me.

That said, I know something about shopping because of the newspaper business. The traditional backbone of the community newspaper has been advertising from the retail shops along Main Street, USA. No longer is that the secure source of our revenue. And why? Because the nature of shopping has changed.

Catalogs presaged the change many years ago. Busy residents could scan catalogs from different stores, pick out the items they needed or thought they needed, call a store’s 800 number and receive delivery a few days later. It wasn’t necessary to bestir oneself from the living room sofa and go out to see the product. If, when it arrived, it didn’t fit or wasn’t the right color, we could send it back, often postage paid. I used to joke that they should put a try-on room in the post office.

Then came the internet, and more specifically, Amazon. No longer do we have the inconvenience of searching through multiple catalogues. We can now indicate what we want and select from among many manufacturers the precise item we seek. Further, that item may appear at our door within 24 hours, or even the same afternoon for a slightly higher fee. Amazon has become the entire world’s bazaar.

Sometimes people venture out to a store to get a three-dimensional look at the desired goods. Yet often they then retreat to their cellphones and order the same item for less money over the internet. E-commerce is king.

This sea change in shopping has been happening gradually but now is moving at an accelerating pace. At least that is what a recent article, “Is American Retail at a Historic Tipping Point?” by Michael Corkery, in The New York Times tells us: “Between 2010 and 2014, e-commerce grew by an average of $30 billion annually. Over the past three years, average annual growth has increased to $40 billion.” The Times article continues, “This transformation is hollowing out suburban shopping malls, bankrupting longtime brands and leading to staggering job losses.” It has also shaken the money tree of daily and weekly newspapers, as evidenced by the fewer number of pages and hence news stories that newspapers can afford to publish. But we papers are only collateral damage.

“More workers in general merchandise stores have been laid off since October, about 89,000 Americans. That is more than all of the people employed in the United States coal industry, which President Trump championed during the campaign as a prime example of the workers who have been left behind in the economic recovery,” according to The Times. One out of 10 people works in retail, and the consequences of their being unemployed are as upending for society as the loss of jobs for manufacturing workers has been.

We are talking about the disappearing middle class here, folks. The small-store owners and their workers are losing their livelihoods. Shopping malls, with the exception of a luxurious few, are emptying out, and their sales staffs are being laid off. The great irony of Amazon now experimenting with brick-and-mortar stores will hardly replace the thousands of workers cut loose, and robots largely operate their fulfillment centers in huge warehouses.

There is a brilliant little business book by Spencer Johnson called, “Who Moved My Cheese?” which summarizes the current condition in first-grader detail. Retail life as we knew it, in this case the old cheese, is elsewhere. To survive in business now requires innovation, retraining and finding the location of new cheese.