Musings on Retail

So, as part of my rework of my schedule and the like after New Year’s, I’m walking more places. And I’m walking to places that I hadn’t really walked to before. In doing that, I’m walking past retail malls and locations that I haven’t walked past before, and so am seeing new stores and the like and am in a better position to note what’s happening with the malls that I drive past (it’s a lot easier to notice reconstruction and empty stores, for example, when walking past than when driving past). And I’ve seen some fairly major changes. Businesses that had been around for years have closed. Stores that were in one spot for years have moved. Some indoor malls — a mall where all the stores are inside and you walk between them inside the mall, generally — are building additions outside of the mall (which seems weird in Canada, where we have maybe six months of weather when walking outside between stores is desirable). Things are shuffling around a bit, presumably in response to changing retail conditions, probably mainly the rise of online retail. And that got me musing about retail in general.

Online retail, it seems to me, has three big potential advantages (there could be more, but these are the ones that stand out for me). First, the one that it definitely has is a form of convenience: You can buy what you want without having to go to an actual store to do so. This means you can buy things even when the stores aren’t open. You don’t have the physically travel somewhere to buy things. You don’t have to deal with other people — shoppers or employees — to shop. You can do it from your own home on your own schedule. While some people will want this more than others, pretty much everyone can find a case where this really appeals to them. The second one is price, since online retailers don’t have to have storefronts and so can save money that way. The price difference is often not as much as you might think or hope, however. The third is selection, as since their only property can be warehouses they can have more products available, and of course they can always order a product in if they don’t have it in their warehouses, although stores can order products from their suppliers if they don’t have it in stock and if the customer is willing to wait.

But traditional retail also has some advantages. First, it also has a sort of convenience when you want to have something right now. You just go out to the store and, if they have it, you buy it. Online retailers offer same-day delivery, but it costs more and you won’t get that for everything … and it’s still not generally in the range of “this afternoon”. Second, there’s a social aspect that you can’t get online. People do often like to shop as a social event, with a group of people — yes, usually women — going out together, browsing, recommending things and stopping at the food court, and so on. You can’t get that with online retail. And finally, for smaller stores there’s also a personal touch if you’re a regular customer. If you go to the same comic or board game or video game or book store, the employees can get to know you and recommend things for you that they think you’d like based on what they know about you, and can even put things aside for you knowing that you are going to be in soon and might like it. There are recommendations from online retailers, but it isn’t the same. Smaller stores can give better and more personalized service than online retailers.

What I’ve been noticing is that a lot of the big box stores seem to be aiming at the first sort of convenience, making it so that you can get everything that you might want right now from their store. Walmart added groceries to their already wide line-up. Canadian Tire, noted for hardware, also added groceries. Drug stores are adding grocery sections as well. Since groceries tend to be things that you want right now and don’t want to wait a couple of days for, this makes them hubs for shoppers who don’t want to wait for things and want to leave the store with the products they’re looking for. So far, these moves seem to be more or less successful, as they don’t seem to be backtracking on it and those are the stores that seem to be doing well, compared to a more traditional department store like “The Bay” which is somewhat struggling.

What I haven’t seen is as much of an emphasis of smaller stores to focus on service or providing one set of products really well. I’m not the most social person in the world and so might miss it, but there really doesn’t seem to be any kind of increased emphasis on service in the smaller stores, which is the one thing that those stores could really provide. Instead, the smaller stores seem to be going out of business or trying to provide a wider selection rather than being very good at what they do provide. Is this because they don’t see how this can make a difference, or because they aren’t capable of providing it, or because customers, in general, don’t think it makes a difference and only care about convenience and price? I don’t know myself, but would definitely like smaller stores to advertise and push for having better customer service than the alternatives.