Updates
November 25, 2012: big-box stores wrestle e-commerce gorilla, WSJ
Indeed, Amazon, whose global revenue from retail totaled $46.5 billion in 2011, is the gorilla in the e-commerce room.
By comparison, Wal-Mart has said it expects to do over $9 billion in global e-commerce revenue in fiscal 2014, beginning in February.
Amazon sells many of the same products as big-box stores but can undercut them on price due to lower overhead. It also uses computer algorithms to adjust prices in real time. Traditional retailers often can't move as rapidly because online prices must match those in stores.September 26, 2012: I have thought about my earlier comment regarding TRU (see below). I think I'm wrong. Now: to store, shipping is free; to home, orders > $49 are free; so it may not seem as bad as it might. I also assume I was wrong yesterday when I suggested ordering on-line, TRU would ship the item to the store; I assume they would do that only if the item was not already available there. Now it sounds more like one-day layaway. Maybe it will work but adding staff to make it work seems problematic. Bottom line: I'm probably wrong. Maybe TRU should market it as "same-day layaway" or "one-day layaway."
Original Post
September 25, 2012: Staples accelerating closure of previously announced closures.
September 25, 2012: Toys 'R Us -- new business model -- folks order on-line; pick-up product in store; this will be interesting to watch. Two thoughts: it's possible busy folks enjoy shopping on-line, only to have to drive to the nearest Toys 'R Us store; find parking; walk to customer service; stand in line; etc., etc. Second thought: we now have a middle person in the mix to mess up the order -- minimum-pay associates receiving, retrieving items. Big Box stores are geared for large shipments to arrive; now they will be getting individual packages that need to be stored in such a way they are easily retrievable when the customer comes in. Recipe for success or recipe for disaster. Wouldn't "free" shipping be easier and more reliable? The whole goal is to get more foot traffic; I don't see it. The demographics don't work: unless it's grandparents doing most of Toys 'R Us shopping, it won't work. Young parents today are wired to the 'net. They love ordering on-line and getting stuff delivered.
It will be very interesting to see how it shakes out. Consumers want a local "show room" to pick out what they like, then go home and buy it cheaper on Amazon. I think this is killing Best Buy. So can the "show rooms" compete with the "Amazons" by holding limited in-store inventory, "small box" stores, and free pick up at the store or home delivery?
ReplyDeleteQuick knee-jerk response: the only way the big box stores will survive is by establishing a "sincere" / meaningful relationship with the customer. The staff is going to have to be seen as watching out for the consumer, looking for the best deal for the customer even if it means steering them to a competitor. The staff is going to have to be able to offer deals on the spot. A big irritant for me in big box stores is pushing "warranties" on me. The problem is: how often do you really visit a Best Buy for electronic equipment, maybe once a year?
DeleteYes, this is going to be very interesting to watch this shake out. With no change in big store "culture" they won't survive.