Is Retail Going Full Circle?

[Pat Germain]

I've read multiple discussions over the past year lamenting the loss of brick and mortar retail outlets to online competitors. I too am sorry to see very good local shops going belly-up. I like supporting my local Woodcraft, for example. I get the convenience of walking in and grabbing something off the shelf (when they have it) and I don't mind paying a few more dollars for that convenience.

Yet, living in the West, it occurred to me the early pioneers relied heavily on an "online" retailer. Since there were few or no local shops, farmers and ranchers used The Sears and Roebuck Catalogue. This publication was legendary for providing anything rural Americans could want. And it proved handy in the outhouse to boot.

Eventually, as the West was developed, more and more retail shops made the Sears catalogue less necessary. Not long ago, the catalogue became no more. For me, it is now only memories of turning the pages of the Sears "Wishbook" and dreaming of bicycles, skateboards and the newest cool toys.

Now, many online retailers are providing equipment and accessories to hobbyists and small businesses nationwide. Sometimes they have things not locally available. Other times they simply offer very good value.

It seems to me the retail model has gone full circle. Is this such a bad thing?

[Ken Fitzgerald]

Pat,

I think you are right. The biggest effect I can see is the financial effect on the local economy. The local retailer usually lives in the local area and spends most of their profits in the local area. The other effect is as you stated not being able to hold it and view it. I was in Arlington, TX last June and met with a small group of Creekers. We invaded the local Rockler. It was my first time in a Rockler. I was able to hold, inspect and purchase a tenoning jig for my tablesaw. I had it shipped home. That was convenient.

[Randal Stevenson]

In the older days, it was cheaper to have a centrally (to its area) located warehouse, that would ship out. Then the retail section came in and made it much easier to both buy, and more importantly return (in case of problems). That made the catalog less desirable. Now, with the internet, (although some catalogs worked this way to), it is easier to return, as you can go to their local B&M, or you can RMA (and if problems, getting the word out and affecting their business, is easier).

Now, look at the job market and the economy. It runs in cycles as well.

[Larry Edgerton]

All the tools look good on-line.......

[Bob Rufener]

I live near a small town and do like to support the local businesses. They have a tough time. Many small town main streets, unfortunately, have a lot of "extinct" businesses. Nearest borg is about 25 minutes from my house and abut 35-40 minutes to a Woodcraft or Rockler. I think part of the issue with local stores is having so much money tied up in inventory and with the availability of on line purchases, it makes it tough to survive. No sales taxes to boot when purchased over the net. We get inundated with catalogs every week-mostly for my wife. I have made a number of purchases on line and through catalogs but it sure is nice to look and hold it before I buy it.

[Joe Pelonio]

We bought just about all of our Christmas gifts this year from Amazon (via the Creek). Several times a week we get shipments from various catalog companies with clothing that the women in the house have bought. None of this is helping the retailers, in the bad economy, as their rents increase and sales fall. It's a vicious circle, because we buyers have to look for the best bargains we can, and that's mostly online. I just bought two bluetooth headsets which are Motorola but coming from China, with free shipping and priced at $14.50 and $26.50. Here at a retailer those would have been $69 and $99. My research indicates that even buying it here, they are made at Motorola plants in China. This is from the Motorola website:

"Motorola entered the Chinese market in 1987 when it opened a representative office in Beijing. In 1992, Motorola (China) Electronics Ltd. was established in Tianjin, where it primarily manufactures mobile phones, two-way radios, wireless communications equipment, semiconductor products and automobile electronics for the Chinese market and other markets in the world."

[Pat Germain]

Interesting points, Joe.

Supporting Amazon.com is supporting an American business. Although, it's certainly not a local business. Just about anything we by these days, from any retailer, it going to come from overseas. Buying American can be tough when even a Ford or Chevy could come from Japan.

It is a bad situation for local retailers. The retail purchasing model is changing and they're having a tough time rolling with those changes. It's a bummer, but such is the way of retail.

Perhaps with a declining economy, retail space will become more affordable. This would lower overhead for local businesses and help them to be more competitive. I know there are empty shopping centers all over the place in this country. Local sales tax relief would also help.

[Chris Padilla]

I dunno. Just because you are buying online, some ONE some WHERE is making money. It could be a "mom and pop" online store located in "out of the way", Wisconsin, couldn't it?

There is a breaking point. Buying clothes online is hard. Buying shoes online is tough. I don't normally buy pizza, salsa, chips, beer, milk, eggs, and cheese online. I don't order chinese food online. REI has a deal where you can order online from them and pick it up at a nearby store, no shipping charge (although tax is charged).

[Brian Kent]

Craftsman's Studio began online then added a brick and mortar store in San Diego. I have only visited the store once, but the fact that I could handle the tools, see what fits my hands and what doesn't, has made me eager to order from them again. Their store is very small, just a front room off of their internet order place.

Maybe the full circle can come full circle again to this combination of internet for everyone and hands-on for locals.

Brian

[Joe Pelonio]

Interesting points, Joe.
Perhaps with a declining economy, retail space will become more affordable. This would lower overhead for local businesses and help them to be more competitive. I know there are empty shopping centers all over the place in this country. Local sales tax relief would also help.
I hope you are right. Yesterday up at the north end of Seattle I was truly amazed at the number of vacant storefronts and used car dealerships. Later when at the local borg for screws I saw a huge space empty and a car lot empty. One of my customers is closing up his store and going on-line only, and he sells TVs! He won't need a warehouse, the suppliers will drop ship blind for him.

Then last night we went to dinner at a strip mall in Redmond. The two largest spaces are vacant, as were several others. Only the restaurant and a camera shop still exist on that whole row. My wife tells me that the two larger tenants left, (large chain fabric store, and large chain kitchen/bath store) because the rent got too high. From what some of my retail customers tell me, commercial rents continue to rise even though so many are becoming vacant. At some point it seems like they will have to lower them.

[Chris Padilla]

That is what's great about Capitalism. Things tend to balance themselves out. It can take time and when folks mess with it, it may not seem to work but left to itself, I think things always rebalance themselves.

Those folks who own the properties folks are leaving will lower prices to make them more attractive again. They still likely have payments and taxes on the properties as well!