Listen to the Crickets Amongst the Store Aisles
We have all heard about the end of bricks ‘n mortar retailing: it’s a common topic in business journals and general news media. Move along folks, move along. Nothing to see here. But on a personal level, it hit home with me yesterday.
The Night They Drove Old Macy’s Down
I went to see Tony Bennett in concert (at 90 yrs of age and touring…what an amazing talent) at City Place in West Palm Beach, FL. We arrived early for dinner before the show and discovered that the Macy’s department store was closing.
Macy’s, one of America’s venerable retailers, was closing for lack of business. Closing for lack of business in the heart of a very “happening” location, made up of a mixture of retail, residential, and commercial establishments. A prestigious and highly visible location. And evidently, an unprofitable location
“…My name is Ozymandias, King of Kings; Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay Of that colossal Wreck, boundless and bare The lone and level sands stretch far away.”
…..apologies to Percy Bysshe Shelley
To put a little color to this, per Macy’s announcement “we continue to experience declining traffic in our stores where the majority of our business is still transacted.” Nearby restaurants were packed and the streets were busy. Small shops had some business, but not a lot.
In other words, people had money, but not enough desire to spend it with retailers in sufficient volume to keep them afloat.
Winners And Losers
- Macy’s employees
- Macy’s shareholders
- Vendors selling short tail products
- Vendors selling high value, high price (relatively speaking) items
- Supporting vendors (security, cleaning, food service)
- Local municipality who will lose tax revenue
- Florida state, who will lose tax revenue
- Online retailers employees
- Online retailer investors
- Vendors selling long tail items who now have viable markets
- Consumers who can get goods and services at a same or reduced price
- Supporting vendors (logistics, technology)
I’ll ignore the obvious: you can see them as well as I.
What strikes me is the lack of discussion, at a government policy level, about economic disruptions like this. The death of traditional retailing is the thin edge of the wedge: the death of one business model, replaced by a more economically efficient one is going to become common. And with it, society will be shocked and strained as it adapts.
Get out the popcorn!