The Daily ‘News’ Cycle
Every day we are bombarded with news stories. Add to that social media splatter chatter, and it’s hard to stay focused on which stories could really affect us.
We once gathered news from trusted sources that vetted sources and data. Now we are flooded with disconnected bits of information, and those bits are flying around like debris. We are so inundated with information that we have become “Comfortably Numb.” But quietly, though the sedation, if you listen closely, you can hear a Giraffe weeping in the stuffed animal jungle.
Does it even Matter that Toys “R” Us has announced it will close all remaining 735 stores? They’re not in the music business, right? Well, I’ll confess when I heard the announcement, I really reflected on it. So much so that I reached out to a longtime friend Neil McPhail, who has been a major player in big box retail all his life. I wanted to get his thoughts on the landscape and what the future of retail may look like. Humorously, we have very similar beliefs.
Experience vs. Expedience
The first idea we discussed was the “new truth,” which is that local retail will be judged by the quality of the customer’s experience. And the ones who will survive are those that adapt to that idea.
The other day after the announcement from Toys “R” Us, I actually heard a financial guru on the news patently claim, “That’s the cost of convenience – who wants to schlep out to a store when you can just click and get what you want?” But when we forgo a local shopping experience, the trickle-down has more of an effect than people think. I am an “experience” kind of shopper, and I believe we are entering the phase of true customer reconsideration.
Let’s push out a bit, and ask ourselves how convenient it would be to have no available local retail. What happens to all the developed real estate and malls? McPhail quickly pointed out that REITs (Real Estate Investment Trusts) are buying up malls for pennies on the dollar, with repurposing in mind. Their idea is creating a new model of mixed use development, with homes centered around a retail and entertainment-based core – a very urban concept. Think about that experience versus encountering no one at a big box station to check you out.
Many big box retailers such as Walmart, Target, and Home Depot, et cetera are excited about the “expedient, disengaged tech culture” because they can cut wages via developments like self-checkout stands. However, less wages are never good for a local economy, and empty storefronts hurt all property values. How long will an area remain desirable with empty storefronts popping up all over?
Some Things to Think About
If labor isn’t necessary, customer service is nonexistent, retailers close down, and consumers make the choice of clicking for their shopping, who then pays for the roads, parks, and all the other community facilities and services?
Where do the tax dollars come from? Who pays for the area schools? Business and real estate taxes fund a great deal of services. With the Toys “R” Us closings alone, analysts say 100,000 jobs will be lost. So, consumer dollars are not recycled in the region when all of these retailers close up shop after shop. There were over 5,000 store closings in 2017, and 3,600 so far in 2018. Neil and I are both of the belief that the tax structure of the web will be restructured.
Most everyone realizes that at the local big boxes, the customer experience is less than desirable. Recently, I visited a major sporting goods store. It was 80,000 square feet in size (I was told that is “small” compared to their average stores of 200,000 square feet). They had 15 retail zones, a “wow factor” to die for, and at least 10 checkout stations. These stations were staffed correctly, but they only had eight staffers at the 15 retail zones. And the one really ugly phrase I heard repeated constantly was, “Sorry, that’s not my area. You will have to ask someone else.” This is a leader in sporting retail! At other large stores such as Home Depot or Lowes, it’s the same or worse. That’s enough to make anybody go online. So what can we expect going forward? Do we dare talk about what is honestly happening, or do we let the 800-pound dinosaur in the living room sleep? Is there any hope for smaller local retail?
Here’s my take:
Go back up to the word experiential. But even with that approach in retailing, I have concerns. Providing a unique experience in your store is expensive, and the industry is out of phase with partnering. The squeeze falls on the local retailer, as it should, but supply companies are reviewing whether channel partners are still a viable formula. Add to that the fact that school music directors are beginning to go directly to manufacturers or online, and they are directing their students to do the same – that definitely puts a hefty burden on local music stores. What those directors overlook is the degree of assistance in specialized knowledge we provide our communities. They also overlook the educational support we provide the schools, themselves.
So Here’s the Outro:
Just like a musician, you have to play better. You can’t just be good; you have to be great. You have to anticipate needs and trends. You have to have a standard of excellence that is inspiring, and you need to read a measure ahead. Beyond a shadow of a doubt, you must exploit the weaknesses in box formulas. It is essential that you study, become savvy, and have style and – most of all – provide an experience that is unique to your business.
In Nashville there is a small chain of coffee shops called The Frothy Monkey. When you go to the Summer NAMM show this year, stop in one. You will never again go to those other guys while you are in Nashville. That’s experiential, and that’s your answer.
