By Lynn Woolley
Major trends tend to make major changes in society.
When the big suburban malls came in, they virtually destroyed downtown retail in some cities. When Walmart and Kmart ushered in the era of the “big box” stores, they damaged the malls – and now many are going under. Now, online shopping is harming the big box stores.
Each store closing means anywhere from 70 to more than a hundred jobs wiped out. Here’s what it means. The incredible growth of Amazon dot com and other online sellers means we’re going to have a lot of empty buildings where stores used to be – and a lot of people without jobs. There is no way to halt or reverse the trend. Malls will soon be gone, and big box stores will be adapting to online sales.
None of this is necessarily bad – unless your job gets axed.
Internet retail is the latest in what’s known as “disruptive technology.” The word processor disrupted and virtually wiped out the typewriter. Recorded music has experienced a change in technology since it began with each step obliterating the technology before it.
It went from cylinders to 78 rpm platters to 45 rpm disks to 33 rpm albums, to 4-track tapes to 8-track tapes to cassette tapes to CD’s – and now to such things as MP3 downloads from Apple, iTunes and so on.
Broadcasting is in the middle of a major disruption.
But it always has been. AM radio fought off television by switching from dramas and comedies to music and news formats. Then, FM radio forced AM into talk. Now, both AM and FM are fighting to survive in the era of Sirius-XM, music downloads, Pandora & Spotify, and internet radio stations. On-air TV has been fighting cable for years. And now has to take on new threats from HULU and Netflix. It never stops – nor should it.
But mind you this: if you want AM radio to continue, you have to listen to it and your business should support it with advertising. Otherwise, the other, trendier formats, will destroy it. AM radio probably has less than ten years to remain on the air.  FM and TV will also disappear eventually.
What happened to Macy’s?
The big department chain has lost 55 percent of its net worth since 2006. In fact ALL the big department chains have lost worth – with Walmart faring the best.
Here is a chart showing the relative net worth of the country’s largest retail chains, comparing 2006 worth to worth in 2016 – in billions of dollars:
Walmart: $214 billion – $212.4 billion (down .7%)
Target: $51.3 billion – $40.6 billion (down 21%)
Nordstrom: $12.4 billion – $8.3 billion (down 33%)
Best Buy: $28.4 billion – $13.4 billion (down 53%)
Macy’s: $24.2 billion – $11 billion (down 55%)
Kohl’s: $24.2 billion – $8.7 billion (down 64%)
JCPenny: $18.1 billion – $2.6 billion (down 86%)
Sears: $27.8 billion – $1 billion (down 97%)
Source: Yahoo Finance @nickfranco; Dallas Morning News
As you can see, Walmart is in good shape – and it has a vigorous online presence. JCPenny and Sears are hanging on by a thread. Any of these stores that does not start selling online is going to fail. The trend does not lie.
Meanwhile, how is Amazon.com doing?
Quite well, thank you. During his same period, its growth is astounding.
Amazon: $17.5 billion – $356.3 billion (up 1,936%)
This tells us that Amazon and other online retailers are the wave of the future. It seems counter intuitive. Why would a person want to buy something online, seeing only a photo, and have to pay shipping and wait several days to get something that may not fit and may have to be returned?
That is the mystery. But the trend is not going to go away.
The pain of Macy’s closures.
Here is a list of the eight stores closing and the number of lost jobs:
Parkdale, Beaumont: 67 jobs
Southwest Center, Dallas: 68 jobs
Sunland Park, El Paso: 71 jobs
Greenspoint, Houston: 70 jobs
West Oak Mall, Houston: 135 jobs,
Pasadena Town Square: 78 jobs
Collin Creek Mall, Plano: 103 jobs
Broadway Square, Tyler: 65 jobs
The strangest thing about all this is that online buying, even with discounts, seems a step backward from being able to try something on, examine it up close, and be able to walk out the door with it after the purchase. It is not an improvement over the old way – in the manner that a CD might be considered better than a vinyl record or a cell phone is a step up from a walkie-talkie.
Online buying can be a pain if your shoes arrive and don’t fit – or if your DVD set arrives damaged. Then, you have to go through the process of returning it – and that’s harder than just driving back to a store for a return.
But just as the landline is virtually dead due to cell devices, online buying is in a major upward trend. We’re not shopping at stores as much and so they are going to close. Will the world be better or worse when most stores are virtual? I think it will be a disaster – but chances are that people fifteen years younger will see it differently.