Sunday, July 24, 2011

the death of a retailer….

So, I went to the going out of business sale of Borders Books yesterday somewhere near Washington, D.C.  I was with my daughter, Cortney and her new fiance Jimmy.  It was hot outside and we were looking for something to do before they dropped me off at the airport.Borders

This is a scene that is happening far too often these days.  As a sort of evolution in retail, the big bad Borders, the book retailer shark that ate the small retail bookstore, was eaten themselves by even bigger sharks like Amazon and all of the dotcoms out there.  It seems we might want to see a new version of “You’ve Got Mail” with Tom Hanks’ bookstore being the sympathetic victim.

Any kind of retail is difficult.  But now, with warp speed developments in technology changing how people get information and shop, it is damned near impossible.  Profit, that thing that no consumer wants to pay, but the necessary element of successful retail, is more and more difficult to achieve with ever more transparency.

It used to be that you paid the price of the local merchant, who probably bought his wares from a distributor, who in turn, purchased his stuff directly from the manufacturer.  It was a system that worked well for a long time.

Then, retailers determined they could buy better by forming cooperative groups to buy directly from manufacturers, using the buying power of the group, but still having inflated costs through inefficient logistics.

And then, we started to see the mega retailers (Wal-Mart, Target), who not only purchased from these manufacturers, but delivered enough scale to dictate the terms of the sale.  They decided how much they would pay and it was up to the manufacturer to meet those demands, or they would simply buy from someone else.

You would think it would end there.  But, it won’t.  Information is too prevalent, too available.  Some manufacturers are selling directly to their consumer, controlling the message, the price and the sale from beginning to end.  Ever heard of Apple, the company sitting on a ridiculously crazy $76 billion in cash?

So, as we think of how sad it is to see Borders going down the tubes, it is just a part of retail evolution.  And, one day we will mourn the demise of Apple.   That’s just how things work.

1 comment:

  1. Sigh, so very true. Look what's happening in downtown Fort.