Brick and Mortar retail is slowly dying

[Parliament 14392]

Another casualty:

http://www.startribune.com/bon-ton-owner-of-herberger-s-confirms-liquidation/480001193/

 Bon-Ton Stores Inc., owner of Herberger’s, Younkers and 200 other regional department stores, confirmed it will go out of business after the winning bid in a bankruptcy auction for the company’s assets went to liquidators.

A hearing by the bankruptcy court to approve the sale and wind-down of the company’s operations is scheduled Wednesday, the company said in a statement late Tuesday. 

“While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern,” said Bill Tracy, Bon-Ton’s president and chief executive. He said Bon-Ton will work with the winning bidder to “ensure an orderly wind-down of operations.”

Bon-Ton had been in talks with U.S. mall owners Namdar Realty Group and Washington Prime Group Inc. to secure a bid that would have kept open a large portion of Bon-Ton locations. Bon-Ton is a major tenant of both landlords and its survival would have helped protect the value of their malls.

The failure of the company, with headquarters in York, Pa., and Milwaukee, comes weeks after Toys ‘R’ Us began a piecemeal liquidation of its namesake stores and Babies ‘R’ Us, the latest sign of upheaval in the retail industry.

The company has 14 Herberger’s stores in Minnesota, including at Rosedale and Southdale, and in St. Paul, Bloomington, Blaine and Stillwater. A clearance center in Maplewood closed several weeks ago.

I, for one, welcome our Amazon overlords.

Edited May 31, 2018 by Parliament
fixed

[NeverMarryAStripper 22033]

Does this mean that next time I build a house I will have to get my bricks and mortar from amazon?

[Wally Fairway 5607]

56 minutes ago, NeverMarryAStripper said:

Does this mean that next time I build a house I will have to get my bricks and mortar from amazon?

Nope,
But you will need to get your Bon-Tons, Toys'R'you, and everything else from Amazon and/or Wal-Mart.
Welcome to America 1984 2018, just part of Skynet taking control
 

[skittlebrau 474]

No shit. Dynamite revelation here.

[Brew 3049]

Fuck Amazon, I still prefer to walk into a store, look at the options, talk to people, etc. Interaction with people other than your Fed Ex delivery driver isn’t such a bad thing. I’ve placed a grand total of one order with Amazon and I don’t see that changing any time soon.

[Judge Roybeanbag 11829]

Eh, in the early 20th century you could order a house from sears.  

[Aqua Buddha 14658]

AMZN spent $14B on Whole Foods because they needed brick and mortar.

Shitty brick and mortar chains are dying.  Brick and mortar in the traditional sense has always been here and always will be because it's the most efficient way to deliver most consumer good.

[cabowabo 4578]

Fuck Amazon, I still prefer to walk into a store, look at the options, talk to people, etc. Interaction with people other than your Fed Ex delivery driver isn’t such a bad thing. I’ve placed a grand total of one order with Amazon and I don’t see that changing any time soon.

Fuck that.

[Parliament 14392]

8 hours ago, Judge Roybeanbag said:

Eh, in the early 20th century you could order a house from sears.  

And just about anything else.  The only difference between that and this is the catalog is electronic.  So how did Sears mess it up so bad?

[Judge Roybeanbag 11829]

They didn't get out of brick and mortar fast enough.

[Equinox 95]

9 hours ago, Brew said:

Fuck Amazon, I still prefer to walk into a store, look at the options....

And then go home and order it online.

[Eastwood 4394]

More specifically, retailers didn't get out of ridiculous margins for tertiary items. There was a time where Best Buy was charging $50 for a gold plated HDMI cable and Amazon was selling regular HDMI cables for $5. It was the same for other high margin items in big box stores. Once people gave Amazon a shot and realized that it was more convenient and that big box stores were ridiculously over charging for some items, people never turned back.

[dieucla98 2942]

Brick and Mortar is still 90%+ of retail in the US. 

It may be declining, but it's still the dominating path to market.

Edit: Even in consumer electronics, which one would think is a very heavy eTail market compared to, for example, food and bev... Only 35% of sales is done online vs 65% in brick and mortar.

Edited April 20, 2018 by dieucla98

[BurntOrange&White 40480]

Eh, in the early 20th century you could order a house from sears.  

For $12000 if I’m not mistaken.

[SDG 3319]

I’ve almost completely converted to online shopping. There is just too much convenients and variety not to. 

I still prefer b&m for big ticket items like cars and computers but everything else, including most groceries, are purchased online. 

Last holiday season I did all of my Black Friday shopping online. Got everything I wanted with no black eyes or bullet holes.  

Edited April 20, 2018 by SDG

[Neonmoon 38130]

Most stores provide a simple service. They collect items from different manufacturers and provide them to you locally for a fee. Amazon is doing the same thing, except instead of walking into a collection store, they send it to your house. Most people prefer that over venturing into a store. 

If you don't, you can still find local collection stores like Wal-Mart & Target. I still go to Sprouts for produce & meat & cheese. The rest I order online.

Best Buy: I'm curious to see if they survive or not. I still like going to Best Buy to buy things. But I wouldn't be surprised if they eventually fall by the wayside. It is empty when I go there (which I like). Target has a "tech" section but it's pretty meh. Best Buy seems to try to adapt to the market but I don't know if it will be enough.  They are the go-to for tech items such as computers, tvs, phones, etc. But Amazon could easily take their ball. Am I naive to think people still want a showroom for tech stuff?

Edited April 20, 2018 by Neonmoon

[dieucla98 2942]

2 minutes ago, Neonmoon said:

Most people prefer that over venturing into a store. 

Except they don't....

"Preference" is roughly 50/50 between eTail and retail. Actually purchases is heavily in favor of retail.

[BurntOrange&White 40480]

I prefer to buy clothes at brick and mortar because I prefer to try them on and be done with it and not having to worry about a return for different size

[RDCanecutter 26561]

There are stores and there are stores. If a store has somebody on site with esoteric knowledge gained over a lifetime, I go there. If they are staffed by teens and might-as-well-be-teens playing with tongue-piercings nose-in-phone because Tiffanyyyy just said something about Jessicaaaa, I still go there, then I bitch about it here.

[JimmyHoffa 1188]

11 hours ago, Aqua Buddha said:

AMZN spent $14B on Whole Foods because they needed brick and mortar.

Shitty brick and mortar chains are dying.  Brick and mortar in the traditional sense has always been here and always will be because it's the most efficient way to deliver most consumer good.

 

That wasn't the reason why they bought WF. 

Department stores with a shit ton of overhead and mind numbing  amounts of immovable inventory are the issue and those will continue to go out of business.

[YChang 3473]

Just because most of us on this site prefer to buy stuff online doesn't mean it's close to being the actual behaviors of consumers these days. As already mentioned, bad retail stores will continue to change, shrink, or die off. But brick and mortar shops aren't completely going away any time soon. 

[Red Six 131]

4 hours ago, Parliament said:

And just about anything else.  The only difference between that and this is the catalog is electronic.  So how did Sears mess it up so bad?

Awful leadership and faulty/inefficient deployment of capital and cash.

[irockalltherocks 55]

Well, Amazon did just partner with Best Buy to sell Fire TVs.

https://www.msn.com/en-us/news/technology/in-best-buy-deal-amazon-acknowledges-you-sometimes-need-to-touch-things-to-buy/ar-AAw0O8m

 

[TXLNGHRN10 341]

Brick and Mortar - Big Box stores killed off Mom and Pop local stores because they could deliver more variety and lower prices. Now Amazon is doing the same thing to them.
It's the evolution of retail. I buy most of electronics and kids toys from Amazon. I've started to buy some clothes and shoes from them too. The only Brick and Mortar stores I really go to now are Academy, Walmart and HEB (when it's open).

[Orange&White 5557]

17 hours ago, Parliament said:

Bon-Ton Stores Inc., owner of Herberger’s, Younkers and 200 other regional department stores, confirmed it will go out of business after the winning bid in a bankruptcy auction for the company’s assets went to liquidators.

I remember eating at the Bon Ton in LaGrange in the 80's. The early beginnings of Weikel's.

[Aqua Buddha 14658]

2 hours ago, JimmyHoffa said:

 

That wasn't the reason why they bought WF. 

Department stores with a shit ton of overhead and mind numbing  amounts of immovable inventory are the issue and those will continue to go out of business.

That was the reason they bought WF.  

They needed the brick and mortar for the grocery business they hope to get into.

[El Diablo 4232]

The poors will always need b&m because they can't buy online/they're forced to pay cash. This country has a shitload of poors.

[tokamak 6463]

4 hours ago, Neonmoon said:

Most stores provide a simple service. They collect items from different manufacturers and provide them to you locally for a fee. Amazon is doing the same thing, except instead of walking into a collection store, they send it to your house. Most people prefer that over venturing into a store. 

If you don't, you can still find local collection stores like Wal-Mart & Target. I still go to Sprouts for produce & meat & cheese. The rest I order online.

Best Buy: I'm curious to see if they survive or not. I still like going to Best Buy to buy things. But I wouldn't be surprised if they eventually fall by the wayside. It is empty when I go there (which I like). Target has a "tech" section but it's pretty meh. Best Buy seems to try to adapt to the market but I don't know if it will be enough.  They are the go-to for tech items such as computers, tvs, phones, etc. But Amazon could easily take their ball. Am I naive to think people still want a showroom for tech stuff?

Best Buy's problem is that people will go in, pick out the TV they like, and then buy it on Amazon for 25% less before they even walk out the door. Therefore, they have to price match, which eats into their margins big time.

16 minutes ago, Aqua Buddha said:

That was the reason they bought WF.  

They needed the brick and mortar for the grocery business they hope to get into.

I read a well-thought-out article when that deal went down proposing that what Amazon really wanted was a customer for their logistics operation. In the same way that they built AWS into the juggernaut it is today by handing it a huge customer (the ecommerce operation) from the very beginning, they hope to use WF to ramp up their physical distribution network as a platform. I'm not qualified to comment on the veracity of that, but it sounds reasonable to me.

 

Anyway, I almost made this exact same post a couple days ago after reading an article about Bed, Bath, and Beyond going south. I buy tons of shit on Amazon, but it's not without its problems. I still like going to a physical store in certain cases and for certain items, I guess just not enough for those places to stay afloat.

[TheYoungHorn 68]

Honestly, Walmart has still had a much larger impact on killing out the old retailers (department stores and regional grocers pre-Big-Box era) and big box competitors than AMZN. 

As mentioned previously, eCommerce hasn't even crossed the 10% mark of US retail sales, where WMT is still the dominant player. 

Brick and Mortar is far from dead. Mom and pops, and small boutique retail is on a massive rebound in affluent markets (the same markets AMZN is growing to own) and will continue to grow there. 

Play this out and you'll literally have some weird post-retail-apocalypse scenarios where thriving cities like Austin have tons and tons of independent retailers thriving alongside a humming AMZN powered infrastructure to move the stuff around and sell the commodity stuff and you'll have the rest of the country with only one choice to buy everything--Walmart. 

If you think lack of innovative jobs is exacerbating brain drain on rural America, wait until the cultural/amenity gap becomes even more pronounced. 

[BurntOrange&White 40480]

The poors will always need b&m because they can't buy online/they're forced to pay cash. This country has a shitload of poors.

Lulz. Some of the richest people I know only carry cash and refuse to get credit cards.

[El Diablo 4232]

31 minutes ago, Bevo VIII said:

Lulz. Some of the richest people I know only carry cash and refuse to get credit cards.

I'm sure those are the people keeping brick and mortar afloat.

[bluto 4947]

It is a very strange retail world where there are local/regional players just killing it, along with high end luxury. But that disappearing middle class is absolutely taking a bath. 

[Aqua Buddha 14658]

9 minutes ago, bluto said:

It is a very strange retail world where there are local/regional players just killing it, along with high end luxury. But that disappearing middle class is absolutely taking a bath. 

You either have to the best or the cheapest.  Anything in the middle and you'll get killed.  Our society is increasingly bi-furcated and the retail landscape is falling that.

[FondrenRoad 4378]

3 hours ago, tokamak said:

Best Buy's problem is that people will go in, pick out the TV they like, and then buy it on Amazon for 25% less before they even walk out the door. Therefore, they have to price match, which eats into their margins big time.

I read a well-thought-out article when that deal went down proposing that what Amazon really wanted was a customer for their logistics operation. In the same way that they built AWS into the juggernaut it is today by handing it a huge customer (the ecommerce operation) from the very beginning, they hope to use WF to ramp up their physical distribution network as a platform. I'm not qualified to comment on the veracity of that, but it sounds reasonable to me.

 

Anyway, I almost made this exact same post a couple days ago after reading an article about Bed, Bath, and Beyond going south. I buy tons of shit on Amazon, but it's not without its problems. I still like going to a physical store in certain cases and for certain items, I guess just not enough for those places to stay afloat.

Sounds like something Best Buy could cure with 20% coupons.  Really though, if they want to compete, they need free delivery, but there's no way they can provide that at a profit.  It isn't enough to match purchase price on large electronics and appliances when Amazon will have it at your door at no extra charge.

[Aqua Buddha 14658]

3 hours ago, TheYoungHorn said:

Honestly, Walmart has still had a much larger impact on killing out the old retailers (department stores and regional grocers pre-Big-Box era) and big box competitors than AMZN. 

As mentioned previously, eCommerce hasn't even crossed the 10% mark of US retail sales, where WMT is still the dominant player. 

Brick and Mortar is far from dead. Mom and pops, and small boutique retail is on a massive rebound in affluent markets (the same markets AMZN is growing to own) and will continue to grow there. 

Play this out and you'll literally have some weird post-retail-apocalypse scenarios where thriving cities like Austin have tons and tons of independent retailers thriving alongside a humming AMZN powered infrastructure to move the stuff around and sell the commodity stuff and you'll have the rest of the country with only one choice to buy everything--Walmart. 

If you think lack of innovative jobs is exacerbating brain drain on rural America, wait until the cultural/amenity gap becomes even more pronounced. 

I agree with that future state in all categories except food/grocery.  You'll still have big boxes there.  In the apparel space, you'll see something exactly like you described if you haven't already in some cities.  It'll be either be cheap and mass market or indie boutiques.  

3 hours ago, tokamak said:

Best Buy's problem is that people will go in, pick out the TV they like, and then buy it on Amazon for 25% less before they even walk out the door. Therefore, they have to price match, which eats into their margins big time.

I read a well-thought-out article when that deal went down proposing that what Amazon really wanted was a customer for their logistics operation. In the same way that they built AWS into the juggernaut it is today by handing it a huge customer (the ecommerce operation) from the very beginning, they hope to use WF to ramp up their physical distribution network as a platform. I'm not qualified to comment on the veracity of that, but it sounds reasonable to me.

 

Anyway, I almost made this exact same post a couple days ago after reading an article about Bed, Bath, and Beyond going south. I buy tons of shit on Amazon, but it's not without its problems. I still like going to a physical store in certain cases and for certain items, I guess just not enough for those places to stay afloat.

That was one of the strategies to a degree.  When they stood up AWS, if was mostly to give their site it's own platform.  They then took the extra cloud space to market and dominated that market.  Their long game here may be something similar with their own branded products.  They needed a platform (WF) and will try to use the platform to grow the space.  They still needed the physical infrastructure, though.  However, a significant difference is the grocery spaces is FAR more mature and established that the cloud space was.  There are a lot of entrenched and well run players, especially at the lower end.  

BB&B is a typical case study of what's going on in the industry.  A lot of these mid tier retailers are just buried in debt and there's no way they'll ever get out of it.  Some of them are even cash flow positive aside from that.  (Toys R Us was like that but they had to make $400M annual interest payments.)

[Aqua Buddha 14658]

4 minutes ago, FondrenRoad said:

Sounds like something Best Buy could cure with 20% coupons.  Really though, if they want to compete, they need free delivery, but there's no way they can provide that at a profit.  It isn't enough to match purchase price on large electronics and appliances when Amazon will have it at your door at no extra charge.

AMZN can't provide it at a profit, either, but they're held to a different P&L standard than Best Buy.

[FondrenRoad 4378]

4 minutes ago, Aqua Buddha said:

You either have to the best or the cheapest.  Anything in the middle and you'll get killed.  Our society is increasingly bi-furcated and the retail landscape is falling that.

Yeah, places like Trader Joe's and Aldi are doing it with scale.  A ridiculous amount of customers go through their smallish urban stores. 

I don't think its as bifurcated as you claim though.  I just think urban centers survived the big box apocalypse while small towns didn't.  I think it will settle down some after the move back to town centers completes.  Malls and strip centers were overbuilt even for their heyday.  However, a town with 5,000 people around it could support a little main street with mom and pops and small chain retailers if Walmart left them alone.  I also think the push toward having fewer malls and adding entertainment anchors to them will work in smaller towns too.

[FondrenRoad 4378]

1 minute ago, Aqua Buddha said:

AMZN can't provide it at a profit, either, but they're held to a different P&L standard than Best Buy.

They don't have to.  They profit elsewhere now-a-days.  Best Buy is only doing one thing.  They can't compete with a company that's willing to do that thing at a loss.  And even if you take out AWS, and look at prime, they can ship an AC unit to someone at a loss because that person is going to buy more things at Amazon where they can profit and get invested in the ecosystem.

[Aqua Buddha 14658]

1 minute ago, FondrenRoad said:

They don't have to.  They profit elsewhere now-a-days.  Best Buy is only doing one thing.  They can't compete with a company that's willing to do that thing at a loss.  And even if you take out AWS, and look at prime, they can ship an AC unit to someone at a loss because that person is going to buy more things at Amazon where they can profit and get invested in the ecosystem.

Yeah, AWS basically floats the entire company but the Prime model on it's own is basically the Costco/Sam's club model.  Run flat or a loss on merchandise but make the revenue on membership fees, which in theory is pure profit.  

AMZN''s real advantage is they trade like a tech company while the rest of the competition is forced to trade like a traditional retailer.  If any of them suspended their dividend and announced all future profits would be devoted to investments in the business, their stock would crash in a spectacular bloodbath. 

[Fudge Nuggets 19283]

9 hours ago, SDG said:

last holiday season I did all of my Black Friday shopping online. Got everything I wanted with no black eyes or bullet holes.  

I have done all my Christmas shopping online for the last four years except for my mom's present.  I live out of the country and only get back at Christmas so the strategery is to buy the gifts for everyone else online, send them to my mom's house and she wraps them because she loves that shit.  Before we get back to Houston I find out from my dad what mom wants and I figure out where to get it.  One trip to a store and gift wrapping station during maniac season is enough for me.

[Fudge Nuggets 19283]

1 hour ago, FondrenRoad said:

Sounds like something Best Buy could cure with 20% coupons.  Really though, if they want to compete, they need free delivery, but there's no way they can provide that at a profit.  It isn't enough to match purchase price on large electronics and appliances when Amazon will have it at your door at no extra charge.

Amazon will not have it at your door for no extra charge.  At best you are paying a $100 Amazon Prime membership fee for that service.

Now if you are one of those kind that never wants to leave your house and gets Amazon packages delivered 4x per day then this is a good deal.  If not, then it may not be such a great deal depending on how many times you order stuff from Best Buy that has to be delivered.

[FondrenRoad 4378]

3 minutes ago, Fudge Nuggets said:

Amazon will not have it at your door for no extra charge.  At best you are paying a $100 Amazon Prime membership fee for that service.

Now if you are one of those kind that never wants to leave your house and gets Amazon packages delivered 4x per day then this is a good deal.  If not, then it may not be such a great deal depending on how many times you order stuff from Best Buy that has to be delivered.

Actually, I'm paying $100 at worst because I'd have to do nothing else at all with Amazon for a year for the total prime membership charge to be applied to a single purchase.

Instead, I get free shipping on that TV.  I also get free shipping on 40 to 50 or so other things from Amazon per year, all at cheaper prices than I would pay locally or at box stores.  4x per day, lol.

And I get a comparable service to Netflix that Netflix charges $130 a year for.  Really, if all you did was watch free with Prime videos and purchased nothing from Amazon, its still worth it.

[Fudge Nuggets 19283]

1 hour ago, Aqua Buddha said:

AMZN''s real advantage is they trade like a tech company while the rest of the competition is forced to trade like a traditional retailer.  If any of them suspended their dividend and announced all future profits would be devoted to investments in the business, their stock would crash in a spectacular bloodbath. 

Yeah, but if any of them suspended their cash dividend and instead announce they are seeking to raise a few hundred million through a pre-sale of initial coin offerings to "strategic purchasers" via their revolutionary proprietary blockchain tangible asset system, then their stock price will shoot to the fucking moon.

Suck it AMZN!!#@#@!!!!!

[Aqua Buddha 14658]

7 minutes ago, FondrenRoad said:

Actually, I'm paying $100 at worst because I'd have to do nothing else at all with Amazon for a year for the total prime membership charge to be applied to a single purchase.

Instead, I get free shipping on that TV.  I also get free shipping on 40 to 50 or so other things from Amazon per year, all at cheaper prices than I would pay locally or at box stores.  4x per day, lol.

And I get a comparable service to Netflix that Netflix charges $130 a year for.  Really, if all you did was watch free with Prime videos and purchased nothing from Amazon, its still worth it.

Kind of like the club model.  A lot of people keep a Sam's membership just for the gas and tires.

[FondrenRoad 4378]

1 minute ago, Aqua Buddha said:

Kind of like the club model.  A lot of people keep a Sam's membership just for the gas and tires.

Its somewhat like a club model.  However, Amazon will ship a lot of things free and slow even without Prime, and they don't generally charge different prices for non-Prime members.  Its mostly about ecosystem adoption following the Apple model.  Once you're in, its hard to get out.  That's why Echos cost practically nothing for what they do.

[Fudge Nuggets 19283]

Just now, FondrenRoad said:

and they don't generally charge different prices for non-Prime members.

That has not been the case for stuff I purchase.  Almost every thing gives a substantial discount (20-30%) if you are willing to sign up for Amazon Prime, for a small fee of $100. 

[Brew 3049]

3 hours ago, Aqua Buddha said:

AMZN can't provide it at a profit, either, but they're held to a different P&L standard than Best Buy.

That tide has to turn at some point.

I just can’t see not going to a store for most things. I don’t live in an overly large City though so it’s no significant issue to stop and get most things. I see people I know, clients, friends, etc while I’m out. I still go to Best Buy if I want a TV so I can see them. I go to the golf store if I want golf clubs so I can swing a few. I go pick my own steak out at the butcher so I get what I want. Picking up other stuff at the same time isn’t difficult. Bunch of anti social people.

[Aqua Buddha 14658]

36 minutes ago, Brew said:

That tide has to turn at some point.

I just can’t see not going to a store for most things. I don’t live in an overly large City though so it’s no significant issue to stop and get most things. I see people I know, clients, friends, etc while I’m out. I still go to Best Buy if I want a TV so I can see them. I go to the golf store if I want golf clubs so I can swing a few. I go pick my own steak out at the butcher so I get what I want. Picking up other stuff at the same time isn’t difficult. Bunch of anti social people.

Yeah, B&M is still incredibly important in some categories and it always will be.  A lot of these categories have very slim profit margins and when you factor in home delivery, it's a money loser.  

WMT is testing some home delivery model for grocery right now it's something like a $9 fee for a $30 minimum order.  That's what it takes to make this profitable and no one is going to pay that.  Sure, a handful of people might but not enough to move the needle.

[Lhorn 5026]

Just a thought.

For years Walmart has been demonized by some for providing unfair competition which ultimately drove many small businesses out of business.  People were proud to say that they don't shop at Walmart.

Now Amazon is part of the shopping revolution that's doing the same thing.  What's the difference?  People are proud to says that they get their garlic, shoes, laundry detergent on Amazon.

[Royalfan5 2355]

6 hours ago, Lhorn said:

Just a thought.

For years Walmart has been demonized by some for providing unfair competition which ultimately drove many small businesses out of business.  People were proud to say that they don't shop at Walmart.

Now Amazon is part of the shopping revolution that's doing the same thing.  What's the difference?  People are proud to says that they get their garlic, shoes, laundry detergent on Amazon.

I’d say it’s two things, it’s not a fucking beating to buy something from Amazon like it is to set foot in a WalMart. Also, Mom and Pop can sell on Amazon and you can buy from them if you desire.