Amazon is absolutely crushing all retailers. Even WMT is closing stores. As this continues, what happens when Amazon becomes a monopoly? I remember when I was growing up, there were just a few retail stores, e.g. K-Mart, Sears, etc, and you had to drive 30 miles to get to the next mall. Not that long ago, there was a mall within a couple of miles of the last one, each with a huge number of stores in them. Now I am seeing the decimation of malls in America. Old-school American retail is getting crushed by capitalism Earnings season is sending a massive warning for the retail sector: Big players are getting crushed, and if companies fail to change their strategies, things may go from bad to worse. A slew of weak results sent traditional retailers into a tailspin this week. Gap (GPS) and Ralph Lauren (RL), along with department stores Macy’s (M), Kohl’s (KSS), Nordstrom (JWN) and J.C. Penney (JCP), all disappointed Wall Street with their latest numbers. Gap and Ralph Lauren both reported a drop in comparable sales, falling 7% and 5% respectively. And the results weren’t any better for department stores. Macy’s recorded its worst quarterly results since the recession, Kohl’s posted an 87% decline in its profit, Nordstrom slashed its guidance and J.C. Penney reversed five straight quarters of sales growth. But there’s one massive retailer that’s bucking the trend — Amazon. The e-commerce giant is gaining market share while wreaking havoc on its brick-and-mortar competitors. “Amazon is already the second largest U.S. apparel retailer (trailing only WMT), as thecompany has grown to ~7% of the overall U.S. apparel market. We estimate Amazon will reach 19% share of the U.S. apparel market by 2020,” Morgan Stanley wrote in a note to clients on Thursday. The rise of Amazon (AMZN) is something to be reckoned with. Its massive effect on the retail industry was a central part in Berkshire Hathaway’s (BRK-A, BRK-B) question-and-answer session during its annual shareholder meeting on April 30. Chairman and CEO Warren Buffett, alongside vice chairman Charlie Munger, noted that Amazon’s growth is something to admire, stressing the importance for companies to evolve and stay connected with current trends... http://finance.yahoo.com/news/american-retail-is-getting-crushed-by-capitalism-190519957.html
Yeah it's too easy to order online now. I probably buy 25-30% of my cloths online. You will always need brick and mortar retail to some degree, but you can fill in a lot of the gaps online. When 35% of the retail locations wash out, it will strengthen margins at the brands/locations that survive.
There's one caveat to this model... You can't try on your new clothes when ordering online. That will always keep brick-and-mortar apparel alive. The whole model of returns is going to eat into the online retailer profits if brick-and-mortar goes away. So here's a new thing...Brick-and-mortar Amazon stores, which is where Amazon online sends the clothes everyone online sent back to the online retailer because they didn't fit or whatever. Catch-22.
The money now for an online retail startup seems to be in being the guru or curator - helping people to make those online choices so that they don't have the anxiety of thinking for themselves but can 100% assure they will be beautiful, fashionable, trendy, etc. If you do this on a subscription just send them stuff you "know" they will like, and you get paid like clockwork. Genius. Or was that the model 2 years ago and I am already behind>???
capitalism is good... raises the standard of living... protecting jobs that technology destroys is a way back to the dark ages
Met a programmer working for a startup involved in making an easy way to digitize your body at home or in-studio and use it to dress online avatars for online retail. It's not far off.
Augmented reality? That's all fine and good. But if the glove doesn't fit you must acquit. Virtual reality can never replace the actual putting-on of clothing. "Feeling" how it feels on the body. At least not yet. Maybe in a couple of hundred years when we have holodecks like Star Trek:TNG. But we can't even get our kids to eat vegetables yet. Crack that barrier, and oh, invent quantum warp drives while ye be at it, and MAYBE, just MAYBE, brick-and-mortar will go away. ;-)
I don't think it would make brick and mortar extinct, but I think the portion of the population that will settle for augmented reality over having to go anywhere or return anything is bigger than we think, and there is a slice of market share to still be taken. Capitalizing on laziness works quite well, I'd say. Personally, and hypothetically, if I knew something would fit me well and was made of a generally comfortable material like 100% cotton, I would probably order it without much hesitation.
I think you'd be surprised Overnight, everything is replaceable. They will get a virtual hand print and ensure it fits exactly.