Department Stores – Then, Today, and Tomorrow {and online}

Department Stores – Then, Today, and Tomorrow {and online}

There is constantly quite a bit of chatter regarding the stores that “come and go.”

garden state plaza paramus NJ 1970s - Department Stores - Then, Today, and Tomorrow {and online}

Sears and JC Penney come to mind; as one is almost gone, the other soon to follow.

And what to make of similar stores like Macy’s or Nordstrom?

How do cheap places like Target and Walmart factor in?

All the stores are essentially the same – for different demographics

The core products that each big box store has in common has typically been clothing.

Some places cater to people that are more economically equipped – such as Nordstrom – which sells very high-end clothes. Along with Macy’s to a lesser extent (some “affordable” options as well).

Then dumps like Walmart or Target have the cheapest clothing both in price and quality. But they all meet (or met) a demographic.

Other significant differences also existed.

Sears had a substantial “hardware” section with (once) renowned brands and quality. And even automotive! Not so much for JC Penney, but they’re oddly still around (likely due to financial trickery).

Macy’s and other mid to high-end stores offered no “practical” things other than small kitchen appliances and other electronic junk.

What the Walmarts and Targets of today offer – are a little bit of everything for every part of your life. They were smart to get into food, that is for sure. And cheap technology, of course. (Super high-end tech and audio isn’t what it used to be…)

We look at Target from time to time – and get more disgusted with each subsequent visit. It just feels even cheaper than Walmart for some odd reason (with some exceptions). Thanks to cheap labor in other parts of the world.

So each “department store” over time has (had) different levels of both products as well as customers. No surprise that the most affordable as well as basically practical (food) places have remained afloat.

abandoned mall - Department Stores - Then, Today, and Tomorrow {and online}

Internet casualties for sure

Most of the things sold at Sears and JC Penney can be had for a fraction of the cost elsewhere.

Sears was big for a while with their tools but Home Depot and Lowes smashed that. And far fewer people treat their cars as hobbies anymore – as most things are highly computerized and much less “customization” is happening in the driveways across America (car manufacturers have made that happen). You still have some dopes playing around with their rice-burners in mainly urban environments – but that’s it – and there are plenty of local specialty shops that handle those transactions. And that is dying as well. Far fewer people care about tinkering around anymore.

But everything else? A tap or click away for much less money – and much easier returns or exchanges.

You can’t really feel bad for the shifts in the landscape

Many department stores had good runs. Depending on the “times.”

There were long stretches where “catalog sales” was huge. I’d suspect they’re still huge based on the 100’s of mailed catalogs we receive each month despite the requests to stop them.

But Sears didn’t send out phonebook sized catalogs every other week. It was just once a year – with a special Christmas mailing. We have strong memories of the annual Radio Shack catalog we used to read like the bible.

It was just hard for “department stores” to adapt fast enough to the changing business climate. Despite their attempts at selling everything online (mostly via 3rd parties and other behind-the-scenes drop-shipping arrangements).

They certainly could have competed better with places like the king of the hill Amazon – but it almost wouldn’t have mattered.

The brick-and-mortar “ball and chain” was always going to hold them down. Always. Heavy long-term leases, employee-overhead, insurance, and theft (loss) wasn’t compatible with running a lean operation.

And the online distributors had a big head start especially in terms of logistics and other forward-thinking movements. Efficiency and the ability to quickly change.

Unless they (the old school businesses) could drastically reinvent the wheel for the customer’s benefit – they were doomed to lose.

tech killing retail for how long - Department Stores - Then, Today, and Tomorrow {and online}

Natural expansion leads to niche leaders

Similar to the way Home Depot killed Sears’ hardware offerings – other specialty stores also do the same.

As popular brands (for whatever reason) grow – they often are “exclusive” and not available in big chains. More often than not – a smart move, as they’ve eliminated the middle man, as well as competition against themselves.

(How stores like Polo Ralph Lauren survive being everywhere including deep discount stores still astounds us – and we wonder how long they’ll last. Is the name that powerful still?)

But we really think it’s also possible that the days of long-standing brands may very well be coming to an end as well.

Loyalty isn’t what it used to be for many reasons. The younger generation certainly finds it easy to abandon anything for something better. And the older generations can clearly see how quality has changed for many high-end brands – so they feel betrayed.

The future of stores when online can’t replace “touch and feel”

For a long while, we felt that physical stores would never go away – because there will always be customers that want to inspect their product before investing.

That used to be the smart way of buying. And still is – to some degree. Until that demographic starts (and is) dying out.

With sites like Amazon allowing you to test, try, and inspect almost anything with no risk in the comfort of your own home – that seems to change the game quite significantly.

It’s the new way of doing things (and why investments in UPS and FedEx may not be such a bad idea).

With fast algorithms and data mining – companies will know in a hurry if a product is successful or not, and can adjust production capacity in an instant. That’s one of the few benefits of digital communications and analysis. “Just in Time” manufacturing is a fairly major human achievement in business.

But we still see many people going to the specialty stores at least. Shoes are still huge – as well as electronics. But overall – online shopping is growing by the month.

Does that just mean the old way of “going to the store” is on the way out?

Not entirely – not completely.

Size matters

We think we can be certain that (besides food and hardware/home-improvement), at least two other major segments of businesses will remain able to have physical “stores.”

kitchen appliance showroom - Department Stores - Then, Today, and Tomorrow {and online}

The first that comes to mind is large appliances. Those you cannot “test” at home without great expense (shipping, liability, product damage). You need showrooms for that heavy stuff.

At least today. We hear rumblings about some changes that may be coming in the “heavy” product industry as well. There also may be a point in the future where appliance options are also whittled down to one or two choices, and people stop caring about the features. Wouldn’t be surprised.

We’re unsure about the automotive industry. Don’t even want to guess. Most certainly some kind of financial wizardry going on. The new car lots are EXPANSIVE and all over the country. They remain packed with new cars that are NOT flying off the lots. I won’t predict what – but we’re certain some major jaw-dropping change in the car industry will happen in less than a decade. The charade cannot continue indefinitely.

The other is “super cheap” items and small products. The corner bodega with smokes, candy, bottles of water, etc. I don’t see how online can kill that industry just yet. Common logic – not everyone has space to be prepared with everything they need – nor the memory to be equipped each time they leave the house. People need to pick up shit all the time when on the move. These stores are great for that purpose.

Sidenote: “Reviews”

Most people these days – rely on online reviews for most things they buy. This troubles us.

fake online reviews - Department Stores - Then, Today, and Tomorrow {and online}

Why? Because there is almost no way to know for sure how real or fake they are. While liberal return policies almost eradicate the worry if the review is genuine or not – it’s still a major problem. Mainly in the waste of time and lack of trust that begins to build.

Sure – if you’re dissatisfied with something, you get all your funds back almost always. But what you don’t get back is your time. And at what point do those “Reviews” become so bad and fake that they’re genuinely useless?

I guess word of mouth still has some power. As well as physical inspection (i.e., you see and touch your friend’s garment, etc.)

Sidenote 2: Are we all getting shafted?

When you look at how people like Jeff Bezos are worth billions – it makes you wonder – are we still paying way too much?

The “prices” of things – when you consider all that it takes to acquire them – what else can be cut out? While Amazon and other online sources appear to “save” you money – how much more can be saved? Could they charge 10% less? 20% less? 50% less for that “stuff” that most people waste their money on?

What if a duplicate Amazon came along – and charged only enough to cover overhead, and maybe a little more for emergency investments? Could prices for the end-consumer go down drastically?

Or what if each product manufacturer figured out a way to ship more efficiently? You know – cut out all middle-men? It’s almost 2020 – why do we need centralized stores to buy things from? Does Amazon make shopping that much easier since it’s “all in one?”

Would it make a difference to the domestic economy? What would a few billion in the collective pockets of America mean?

Makes you think – if the entire consumer economy is rigged beyond belief – to give the few privileged folks the riches. I certainly wouldn’t be surprised.

Another reason to simplify your life and figure out a way to not “need” or want any of the crap you buy.

Does it matter how you get your stuff?

In conclusion – it makes you wonder about the whole process of getting “stuff.”

For instance – the human aspect.

robots replace humans - Department Stores - Then, Today, and Tomorrow {and online}

Are you okay with just clicking and getting what you want? Does anyone enjoy the human interaction that once existed? Today – you barely even get to talk to the UPS driver! Do “employees” of such stores offer any value like they used to? Or is everyone already fully informed and has no need for some supposed “expert?” Or have enough human contact that talking to someone at a “store” is now considered a nuisance?

I suppose it depends on the product (the more complicated it is, etc.)

And from what we can see – the “quality” of employees in most places has dwindled drastically. Lackadaisical and unmotivated to be helpful. There are exceptions (like at specialized stores such as MicroCenter for computer components for instance.) But overall – mostly worthless and no added value.

But I’m optimistic that the desire for human interaction won’t go away overnight. It probably needs to “suffer” a little more before the revival. People need to feel what it’s like without before they clamor for it en masse. While it (human interface) comes with overhead – it does provide a subtle value that has been forgotten. Genuine human experiences cannot be bought – even at a massage parlor. It would be so sad if that “connection” went away.

Is it (human connection) absolutely necessary for acquiring “things?” Probably not. But it sure is nice from time to time. Sure beats (digitally) showing your “haul” of superficial stuff on Instagram, that is for shit sure!

Let’s root for humanity again.

Footnote: Marketing and pop culture

One thing that applies to all – is marketing and to an extent peer pressure.

From celebrity endorsements to wide advertising campaigns – as well as “keeping up with the Joneses,” and today more of seeing everyone else with “stuff” on a timeline.

It’s always existed. And most often for practically useless things.

How long will that continue? Or will the next competition be who can live having the least? You never know, at some point many will not have a choice!

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