A recent article from Yahoo Finance listed five big retailers that will likely be gone within the next five years. Below I’ve listed each of the five as well as a few thoughts of my own.
Former CEO Ron Johnson brought sweeping changes to JC Penney’s pricing strategy by doing away with coupons, sales and markdowns. He was convinced that consumers would prefer better everyday values over gimmicky sales and promotions.
Unfortunately for JC Penney, the strategy failed and Johnson was shown the door earlier this month.
Johnson failed to take into account the psychology behind shopping. There’s a reason why stores have sales: they work. Consumers want to think they’re getting a great deal and a sale or coupon makes them feel like a savvy shopper.
Of course, the failed pricing strategy is only part of JC Penney’s problem. The real dilemma is the stagnant sales that spurred the pricing change to begin with.
I don’t know much about JCP’s demographics but as a shopper myself I can say that it would probably never even occur to me to shop there. My wife says they have nice clothes for the kids but we never go there when shopping for ourselves. And whenever I’m there all I see is senior citizens and mom’s with young children. I never see adults shopping for themselves and teenagers are only a rumor.
In other words, the store is largely irrelevant.
Staples is a one-time powerhouse retailer that now finds itself in a world where it is no longer needed. For years the office supply giant was the go-to place for business owners in need of computers, printers, paper, and other supplies.
But once again times have changed and many businesses are little more than one guy with a laptop working out of his home. Many more large businesses are allowing employees to telecommute too, so there just isn’t as much demand for paper, network printers, and tape dispensers.
Also, these days business owners have plenty of other places to go for their supplies and stores like Target and Walmart often offer better prices.
I was recently in the market for a new gas grill and before I decided to splurge on my beautiful Weber Genesis, Sears was one of the stores I visited while shopping around. It was a Saturday afternoon when you would expect a crowd, but as we walked through the store it felt like a ghost town.
There were more employees in the store than there were customers, and that is not a formula for success.
I have fond memories of Sears because when I was young my parents often brought me there to buy new clothes at the start of each school year. But the store’s glory days are decades old and I’d be surprised if Sears is still around in five years.
Radioshack was once a place for do it yourselfers and hobby enthusiasts to buy hard to find items, but those things can now easily be found in Home Depot, Target, Amazon, or eBay (and usually for much less). The handful of times I’ve wandered into a store looking for something and I’ve always been amazed at the high prices.
Every time I walk past a Radioshack, I wonder how they’ve managed to stay in business this long.
Barnes and Noble
I enjoy reading and learning new things, so Barnes and Noble was always one of my favorite stores. I could walk the aisles and there was always some new author or book to discover.
But I didn’t know what true love was until I met Amazon.
I love the fact that I can search for a single title or topic and get dozens or hundreds of selections right at my fingertips. And then most books allow you to “look inside” so you can flip through the pages as if you were standing in a store with a hard copy in your hands. When you’re ready to purchase, you can ignore the price written on the book since almost everything is marked down…and of course you’ll get it shipped right to your door in no time.
By contrast, when I browse around a Barnes and Noble I see the same old titles again and again. I understand it’s a problem of logistics. You just can’t stock a physical store with millions of different titles, while with an online store you can offer an unlimited selection and without the overhead of the store itself.
In other words, Barnes and Noble is just another victim of changing times fighting to maintain it’s relevance in a world that just doesn’t care anymore.