Retail Apocalypse
Fry's Electronics, a store that, if you had visited in the past, is not easily forgotten, announced on February 24th that they would be shutting down operations due to "changes in the retail industry and the challenges posed by the Covid-19 pandemic".
They were not the first to fall to unhospitable retail conditions, and to be honest; the iconic electronics retailer had otherwise lasted the test of time.
Fry's Electronics stood out amongst its competitors by offering a unique design and concept to each one of its locations (28 stores in 9 states). The San Jose, CA based electronics chain decorated each store with a different theme. So much so that when you entered any of their unique locations, it felt like you were transported to another world.
The stores I frequented in Southern California had a space and aquarium theme with a functional café in the center of the store. They offered over 50,000 electronic items in each store, including Home Audio/Video, Computer Peripherals, Car Audio, Appliances, and a very impressive catalog of Blu-Ray Movies, Vinyl Records, and Compact Discs.
They were not the first to fall, however.
Circuit City, a company I had worked for as a young man, closed in March 2009 after a 59-year run. One year before the high-end audio chain, Tweeter ceased operations at every one of its 100 locations.
Right on the heels of this was the closure of many music stores like Tower Records, Sam Goody, and Wherehouse Music in the mid-2010s.
What annihilated these stores?
Why is the consumer market allowing themselves to miss out on the experience of hearing a pair of speakers before buying them or grabbing the latest release from their favorite artist on a Tuesday morning?
Online Competitors would be the stone I would cast.
At the time of this article, e-commerce now accounts for 21.3% of total retail sales, with Amazon having over 37% of the e-commerce retail market as of 2017.
It's more convenient to buy online. Safer. Less expensive. That is the argument most consumers pose when challenged with the question, why don't you want to go to the store anymore?
Even with a vaccine within the grasp of millions of Americans, they now have a new normal. They have grown comfortable ordering online and not risking their health to go to the store. The consumer has changed, and it's still being determined whether retailers understand how much they've changed.
There isn't a store on the planet with Amazon's catalog of offerings.
How can brick-and-mortar retail stores survive the age of e-commerce?
Now, in the wake of the pandemic, we can start to sift through the ashes it left behind. What damage did 2020 and 2021 do to our brick-and-mortar ecosystem?
Hundreds of thousands of companies closed their doors because of the pandemic. Still, at the same time, the US Federal Reserve is claiming they have seen a surge in business entrances in staggering numbers. Could this mean people have weathered the storm and started fresh?
Walmart still commands over 10% of retail sales, so we know they aren't going anywhere.
What about Best Buy? They are starting to close many of their stores, more than usual since the pandemic hit us in 2020.
What destiny lies for many of these juggernaut retailers?
Retail Apocalypse?
Well, I have one idea amongst many solutions that economists and business professionals have offered, which may make little sense initially.
The return of Mom and Pop stores.
Small, boutique brick-and-mortar-style stores have a certain allure as you pass them on the main street of your small town. There is always that comment in the car, "oh, look at that store. It looks nice. We should check it out!"
Do you, though?
Bogey's West Music is a cozy shop owned by a couple, Tammy & Steve, who are long-time music lovers. The store opened on 8-8-88 and is lined with displays filled with new and used Compact Discs and Vinyl Records. The walls are decorated with tie-die shirts featuring some of your favorite classic bands of the 70s and 80s. Decades that are now resurging with the eclectic community and younger generations intrigued by the culture of that period.
For over three decades, the shop has been a staple in an old brick building in the center of Castle Rock, a growing city with a quaint historic district just south of Denver, CO.
The owners are both welcoming and knowledgeable about music. They can special order hard-to-find albums and offer various alternative products. Something is soothing about thumbing through hundreds of vinyl records and discovering posters on the display unit one by one, like turning the page in a book.
Discovering stores like Bogey's, which have served the music lovers of the community for over 30 years while contributing to the city's growth, gives hope to many aspiring entrepreneurs looking to materialize their vision.
Mom and Pop's are safe from extinction; business owners need to discover whether or not they are creating a solution for a potential customer or, even better, establishing a tourist destination.
I doubt there is anything more flattering for a business owner than watching their customers snapping photos for their social media to tout that they were at their place of business.
Are brick and mortars in jeopardy?
Sure, all businesses run the risk of closing if their product, service, or process isn't aligned with the communities culture or current trends.
The ideas are out there, and people need to take heed of these times.
We are seeing major companies fall like dominoes year after year.
This will inevitably leave a void in many niche markets.
One market, in particular, is in the realm of audio.
If Best Buy eventually folds, the only place to listen to the newest gear in audio would be small stores offering such products.
People are nervous about purchasing a piece of audio equipment, regardless of price, if they still need to preview its prowess.
The sound of a pair of speakers or a new amplifier will be significantly different in your space than in the store. However, seeing it up close and personal is a luxury only a few in the US have since most Hifi stores stay closer to the greater metro areas.
I would love to see small boutique stores filled with the newest audio products from various manufacturers.
Eventually, big manufacturers will inevitably have to switch to direct sales online as more and more retail stores fall. Selling direct could hurt them because people have yet to have the chance to test the equipment. I can tell you within a few minutes of spending time with a product whether it's too bright, too flat, or just right. Many consumers need access to that ability. This, in turn, creates a tidal wave of returns that could cripple many manufacturers, barely getting by.
In closing, I can't express enough how important it is to support our local businesses.
Soon we will all see the paradigm shift from big box to small business, and it is our duty as consumers to help small retailers succeed in this way for both of our benefits.
I want to avoid staying inside the rest of my life ordering things online.
I want to go outside and play.