Retail Armageddon: 4 Reasons Amazon is Not to Blame

It was the epidemic I wrote about in my first blog; the retail armageddon that very few else seemed to see coming.   Recently as I’ve been reporting on all the mass store closings of 2017, from brands we as a country took for granted as pillars of our society I’ve been receiving feedback on some great theories of this trend from my readers, as well as many many questions. In my bankruptcy article I received much feedback on how “they always find some way back” when I predicted The Limited’s demise, just four short days later The Limited confessed they were following the foot steps of Kenneth Cole and shuttering all physical store locations.

Most of what I’m hearing is the distinct blame of Amazon one by one taking out the brick and mortar, starting first and foremost with Barnes and Nobles who has seen 158 locations close from 2008 until the first quarter of 2016.  Though when you compare Amazon’s great leap in sales to the store closures of Barnes and Nobles, they do not directly coincide.

screen-shot-2016-11-28-at-5-41-13-pm

Barnes and Nobles’ real struggle was the failed investment in The Nook, that just couldn’t compete with the hype of the Kindle Fire.

It appears compared to Amazon’s giant leap in sales since 2007 (despite a giant recession that only began in 2008) has not led to the direct plummet of Barnes And Nobles.  Store closures are not limited to Barnes and Nobles though, and as we see retail giants like Sears, Macy’s, and K-mart, as well as fashion titans such as Kenneth Cole, Polo Ralph Lauren, and the recently departed The Limited.   Though Amazon has obviously posed threat in competition, it is not what is driving our retail industry into the ground.

  1. Department Stores are not What They Used to Be.

The department stores of today do not hold a glimmer of the lush experience that it once boasted and embraced.   “The Customer is Always Right”, Selfridge’s key slogan has been debunked over and over again, and now is an object of public ridicule.  This ridicule has sparked the Us vs Them  across the check out counter.   Combative employees, strict policies pertaining to purchases and returns, have fostered unwelcoming environments that no longer serve as customer-centric havens.

     2.  #RetailProblems

The hashtag #retailproblems, sweeps social media, discrediting the intelligence of customers and the enjoyment of working with them.  With the lack in jobs, overqualified millennial, fresh out of college, are out of career options and finding themselves bitterly trapped in retail, just what their high school counselors told them they didn’t want while encouraging them to pursue a costly higher education.  The result is a massive sum of student loan debt that is hardly being met by the meager wages as a sales associate with little to no commission as the retail world suffers.

     3.  The Great Recession And The Discount Epidemic

In 2008 the entire country hit a wall of recession as citizens were finding themselves facing the threats of foreclosures and the unemployment line was at an all time high.  With high gas prices, plummeting credit ratings, and shrinking opportunity to land a career consumers were not as apt to spend the reserves of their savings accounts on frivolous commodities.  Naturally retailers took an instant hit.

To keep alive and meet the needs of their customers’, retailers began riding extended waves of discounted products and promotions.  The income they were receiving was not to the margin they truly needed to maintain a properly managed storefront.  Raise freezes for retail managers were enacted, impossible over year sales earning standards were still expected and with that many commissions became the idea of fairy tales.

With the recession was also the rise of in store loss through employee and customer theft.

     4. Bargain Stores

That’s right, brick and mortars are cannibalizing their own with the exact same ammunition  as their competitor, only six months later.  Bargain retailers are taking over the market which sparked with the necessity they held in the recession. Suddenly a trip to TJ Maxx for shoes was no longer a game of finding bargains but instead become a necessity of means.

Though some consumers are finding more change in their pocket since the plummet of gas prices in 2015, they are still gun shy to spend too lavishly.  TJ Maxx and Home Goods has become their home away from home, they are familiar with the aisles and employees; having long forgotten the enjoyment and wonder shopping malls once possessed.

7 RetailersClosing Shop-3.png

All in all these four categories are merely catalysts and do not prove the true root causes of failure for individual employers.  While some retailers are looking to restructure to rebrand or keep up with technology and changing times; other sellers are finding it far more favorable to just throw in the towel after years of a good fight.   Here are the 7 unique problems of 7 big name retailers and what they are planning to do about it.


References:

http://fortune.com/2016/03/03/barnes-noble-results/

https://en.wikipedia.org/wiki/Great_Recession_in_the_United_States#cite_note-46

17 thoughts on “Retail Armageddon: 4 Reasons Amazon is Not to Blame

  1. Vaishnavi @ Dentmaker says:

    So true! It’s saddening to see our favorite brick and mortar stores on the decline. This is a viscious cycle for them – the race to zero with the price tags, fuelled by the recession and declining buyer spend, had put them on pressure. They had succumbed to the declining revenues, with understaffing and low-quality products, resulting in lower quality of service to customers.

    Liked by 1 person

  2. chattykerry says:

    I agree with you. Since my husband was laid off (has a job now), I have had to think carefully about shopping. My most complimented outfits come from Ross or Goodwill. Yesterday I got an $80 dress for just over $14 in Loft. That means it was overpriced in the first place.

    Liked by 1 person

    • shopgirlanonymous says:

      Well that means they broke even on it or just took a loss. Many times we forget that Loft or any retailer has a price they pay for the quality clothing, and then they have to make enough of a profit off of those items to pay rent, bills, pay checks, HR, Accounting, Logistics, Shipments, taxes, etc. To see any sort of a profit means that their product has to be up charged to what they feel is that item’s worth to maintain a company and still see a profit. So it’s not so much overpriced, as it’s just marked for some level of profit.

      Liked by 1 person

  3. Candace says:

    It’s the same here in the UK and as a small business owner myself not only do I struggle with one presence it’s also the multi discounting the large stores do that as an independent I just can’t compete with

    Liked by 1 person

  4. Suze says:

    I wasn’t surprised to hear the Sears was closing doors across the nation. The last time I was in a sears (and I worked off and on for Sears for over ten years) I was met by a clerk who said (yes this is a quote) “well what do YOU want?” when I asked if she could assist me. I told her “nothing now thanks” and took my business (and that 500 dollar sale) to their competitor across the mall.

    Liked by 1 person

    • shopgirlanonymous says:

      A couple of years when I first started my blog, I reblogged a man who had a similar complaint from Sears. That he had gone at opening, and was completely ignored because they were having a team meeting and telling customers they had to wait for assistance?! Uhm, no let’s wake up and start our meetings earlier.

      Like

  5. womanpulse says:

    I completely agree with you even though I do think the ease of online shopping and our world becoming automated has played a part. Similar occurrences have shown true in Restaurants where you can see many top chefs creating casual themed restaurants. Honestly, I believe we don’t have the money for casual spending we did before and it seems to me perhaps customer service isn’t what it was and the products themselves. There seems to be a rise is customers demanding to be heard as far as the products themselves whereas we used to jus deal with what was out there.

    Liked by 2 people

    • shopgirlanonymous says:

      I think our expectations and our ability to really embrace the wonder from discovery has been crippled and numbed by technology. It’s difficult to find unique product that can wow a customer when a wider variety is provided at home. It’s probably why millennials are so actively seeking out experience above all other things, because unique experiences are the thing that are most difficult for them to discover and embrace.

      Liked by 2 people

  6. susanslandry says:

    I can honestly not remember the last time I did anything in a mall department store other than walk through it to get to parking. Stand alone stores, like JcPenneys, Kohls, even Sears I am much more likely to hit…especially when they mail me coupons!

    Liked by 1 person

  7. Clarissa says:

    I couldn’t agree more with this post! There is totally an “us vs. them” mentality on both fronts — customers are quick to defend their place as a consumer and long for the “good ol’ days” of customer service, while employees are basically disgruntled and annoyed from the get-go, although not necessarily at the customer but more at their irritation with their underwhelming and underpaying job, though it certainly gets unleashed on customers….

    -Clarissa @ The View From Here

    Liked by 2 people

  8. Lynn Thaler says:

    I have noticed quality costumer service is getting harder and harder to find. Also, it is a pain to walk around a large department store trying to find an item and there is no way to know if they have it in stock. They may not have the color or size you are looking for, so you just wasted your time.

    Liked by 2 people

    • shopgirlanonymous says:

      Ya, that’s why Customer Service needs to be more proactive, so you aren’t having to stumble around lost all day. Though many times I just call ahead if there is something specific I’m looking for in order to save myself the trip all together.

      Liked by 1 person

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