The Future of Retail

The traditional retail sales of 'Bricks and Mortar' has been declining for a few years now. Ever since the economic downturn, there has been a shift in the use of the Internet to sell goods and services. The year over year increase in the US has been increasing about 20% in online sales. Where as the average increase for in-store sales are currently only 3%. Sears Canada has closed 3 major stores to save themselves about $175 million. The big box department stores have seen the writing on the wall. Although, some stores are expanding. Ones like Costco, Walmart, and Dollar General have seen an increase in sales and are pushing their revenues to new highs. What does this mean? We, as consumers, are going to buy more to save more. Maybe we should look at storage space for investment options. It's a multi-billion dollar industry. The retailers are turning us into amateur hoarders. Let's not get into that right now. That's entirely another topic.

Another future design coming down the pipe is what's happening at JC Penney. Their new retail guru, Ron Johnson, has come up with what could be a great plan. He decided to change the big one store idea in to a Store-Within-A-Store. There will be about 80-100 little stores within the JC Penney itself. In the core will be a Town Square where one can feel out their purchases. maybe a coffee shop or two. I'm not sure how this will look when implemented. Maybe he's on to something. Smaller, boutique-style stores do have a certain appeal. But it is still a JC Penney. We'll see how this turns out.

Ron Johnson was head of Apple's retail plan to create their Apple stores. He left Apple at the peak to work with JC Penney at their low. He needs a challenge. Watch his presentation to understand his rationale. Plan for about 90 minutes. It's worth more to you as an investor or economist than watching an episode of The Bachelor.

Catalogues are also back. the near 100-page catalogues that we used to get are making a comeback. Print is dead, you say. There is still more money spent on advertising in print than any other medium other than TV. Even Internet hasn't quite reached it yet. Surely it will surpass print in time. But now, they working with it again like they used to do to reach the rural markets and now the urban and suburban ones as well. Another link to look at is 'The Sweater'. A true Canadian Classic. It' reminiscent of how items used to be purchased with a catalog. This one shows the Eaton's Catalog. Eaton's is now lost to the realities of economics and poor management. But the stories still remain. This one's only about 10 minutes.


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