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Originally Posted by optimusREIM
That said, I also don't think that what you're saying is correct either. Businesses that want to focus on online sales will do so, those that want to focus on bricks and mortar will do so. There will be winners and losers in both spaces.
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The trend over the last five years on retail in North America has seen many large chains completely close up, often through bankruptcy. In some cases like TopShop they emerge from the ashes as online only brands. Some like Bench swirl around in bankruptcy, close most of their stores and emerge with a new partner. Others like Aeropostale get bought out of bankruptcy and then operated as a "going concern" by their former landlords rather than having mall space sit vacant. Others still like Addition Elle disappear completely.
Then there is the whole group behind Sunrise Records and other retails that sees the void being left by bankruptcy with distressed manufacturers having no channels for goods in production and rushes in to capture and last gasps of dying niche bricks and mortar.
Sure there is lots of growth in off price retail such as Winners, Marshalls and ROSS but that is really the only segment of the larger retail market that has actively been growing on the past approximately five years. And what a surprise as their supply chain is effectively buying merchandise between written off in other channels and trying to make a profit by selling those bulk purchases for a higher net than what they paid.
Quote:
Originally Posted by optimusREIM
There will always be a strong contingent of people that prefer having at least some level of show room to visit. As well as a preference for physically handling the product etc, there is a big group of folks who are committed to supporting local products too. There may be trend towards more online retail, but that doesn't mean that physical retail must die. What I, and many people are saying, is despite your insistence, there is still a big demand for the ability to shop in bricks and mortar stores and there always will be. This is evidenced by the amount of retailers still opening new retail stores...
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I think you are extremely over estimating the preference for bricks and mortar over the amount of price sensitivity in that same group of people. The recent food inflation shows that given a choice between a higher cost and looking at alternatives most people are willing to take alternatives if they can avoid higher prices. Is it worth paying 50% more for a shirt you can buy in a bricks and mortar store v ordering the exact same shirt online from a warehouse? The reality is the majority of consumer items already are flowing through a warehouse. The pricing then includes shipping to a bricks and mortar store, rent on the space, staff wages for that store, eventual write downs on goods that couldn't be sold at the full price, shrink due to things like damaged goods and theft, etc. The cost of that last mile, the bricks and mortar stores, adds a lot to the cost of goods. This is an old example but I remember looking at the cost of music CDs in the 90s. Of the bricks and mortar cost about 50% of that cost was within the portion of the distribution chain after the warehouse level.
Following that model if we have two customers and we give them the exact same amount of money and say "buy some shirts". Bob goes online and buys two shirts with the money. Charlie goes to bricks and mortar and comes back with one shirt. All the shirts are exactly the same, including same brand, fabric, etc. That in a nutshell is why the online transition is happening. It doesn't matter if Bob prefers bricks and mortar stores or Charlie thinks it is unfair he pays more because of his choice of shopping in person. Ultimately the cost of bricks and mortar stores is going to be passed on to those customers that want that channel over online and this isn't some far future thing either, it is already happening. Every notice how stuff is cheaper on places like Amazon than in person or that Amazon has a lot more depth of choices than in person?
Winnipeg tends to lag behind other markets in bricks and mortar retail. In the past five years we have seen national chains closing grocery stores with no one stepping in to fill those voids, some stores have become gyms, part of the former Sears store in Polo, Winnipeg's top level mall, was converted to non-retail space, Hudsons Bay permanently closed what was once their national flagship store, Buy Buy Baby and Bath and Beyond both closed up and left sizable vacancies, Portage Place has effectively stopped having any retail. And all that just scratches the surface of the large trend at play.
Lots of posters here bemoan the lack of retail in downtown Winnipeg. It is a simple thing to change, go open your own shop and help change the trend. I am sure the repeated failures of others will have no influence on your own success.