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Thursday, December 10, 2020
The death of retail
In our living room there is a hifi sound system which is so old, it still has a tape deck. So, my wife, when asked what she wanted for Christmas, asked for a new hifi sound system, fit for the modern age: Digital radio, CD player, bluetooth. I wanted to order it from Amazon, but the wife preferred me buying it at a local big electronics store, because it is easier to return something that doesn't work for some reason. And as we are currently in a period of "lockdown lite", where even non-essential shops are open, I went to buy a hifi sound system.
The good news is that I came home with one. The bad news is that the experience left me completely disappointed and wishing I had just bought something of Amazon. I went at a time where the shop was relatively empty, and there were a number of vendors around. But none of them actually wanted to sell me something, instead fobbing me off to the next guy. Finally I ended up at the end of the food chain, some intern who normally sold telephones and had no clue about sound systems. We managed to find a box that I could buy that had all the keywords I was looking for printed on it, but that was all the advice I was getting at that place. A combination of an online shopping site with a review site open in another window on the PC would have netted a better result, with a greater chance of me actually buying a good system, and probably cheaper to boot.
While I didn't actually want to buy a PS5, I did check in the store that they didn't have any, and didn't have a clue when they would ever get one. The whole supply chain of electronics these days has moved online, where it subsequently was hijacked by bots and scalpers. The ultimately much fairer system of distribution where retail stores have stacks of consoles, and limit customers to buying just one, is dead. Instead the console makers spend more money on marketing than on actually making consoles, launch their new consoles with far too little supply, and get bought out by organized scalpers. To the console company that looks like a success ("Hey, we sold all our consoles!"), but the experience for the average gamer is that only the most affluent end up being able to afford a new console. It is raw Capitalism, worse than Pay2Win or loot boxes, because with Pay2Win or loot boxes the free players at least get to play *something*. In the end, that is very bad for the console maker as well, as their customers are either angry of not being able to get hold of a console before Christmas, or they are angry because they had to pay twice the price, or got scammed by somebody on EBay.
The conclusion is that retail stores have simply given up. Instead of trying to make the retail experience somehow superior to the online shopping experience, they just set up their own website and cut cost on the retail part of the business. Instead of creating foot traffic in their shops with stacks of the latest consoles, they sell all of that console inventory on not very secure websites which are easily overrun by bots. Instead of using their inherent advantages, the human touch, to compete with the likes of Amazon, they are trying and failing to beat Amazon at their own game. I think they will be surprised how the business they lost during the pandemic will not be coming back afterwards.
- posted by Tobold @ 8:26 AM Permanent Link
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That's a nice review.
I also try to look up things online first. I always have to stop my father from buying the first thing that remotely resembles what we need locally.
I also try to look up things online first. I always have to stop my father from buying the first thing that remotely resembles what we need locally.
Great points as always. It is possible to do retail well, look at Apple. I have taken my daughters into an Apple Store to get the odd major purchase, a phone or a laptop, and the staff are fabulous. Not ignoring the fact that the credit card was mine, the assistants dealt with them, treating them like valuable customers with thoughts and requirements. I have also taken in sad children with cracked screens and failed batteries who have left the store as pleased as can be with issues resolved. Apple have a great web store yet it is one retail environment that I still go to for pleasure.
The big box stores are going in the direction of what Radio Shack did in the States: turning into glorified smartphone stores. They --and just about every physical retailer-- are on the short end of the stick for consoles and a lot of other items because the manufacturer prioritizes online sales instead. It's not that they wouldn't want to get their hands on a PS5, it's that when Sony prioritizes online sales there's not much they can do.
As for the lack of experience in selling audio, that doesn't shock me either. The big box stores' profit is in mobile and the other stuff you see at the front, so someone who wants to buy a (for example) decent NAD or Sony or Denon receiver is not prioritized. These stores get more profit from selling Beats headphones to go with the current Samsung Galaxy flagship cell than they do from other things. Not interested in a cell? Oh, here, we'll let.... Frank, yeah, we'll let Frank help you instead.
The problem with a lot of retail stores is that they are supposed to provide profit for investors, and the best way to do that is to sell with minimum amount of overhead. That means they won't pay for experienced sales personnel because it costs more. Apple and a couple of other companies are the exception because Apple has such an incredibly huge warchest of cash AND an incredibly loyal fanbase that they can afford to give you a truly fantastic in-store experience without the investors raising a stink about it. Turn Apple's profit margins into, say, Best Buy's (US big box electronics retailer), and you'll end up with the same result in the Apple stores as with Best Buy. Because the investors will demand more profit over quality, and personnel are the first thing to go.
Breaking this cycle involves companies deciding to invest in quality --and their people-- over the objections of their shareholders. And it also involves manufacturers preferring the in-store experience over the quick buck, which frequently involves a growing dependence on Amazon for their survival.
As for the lack of experience in selling audio, that doesn't shock me either. The big box stores' profit is in mobile and the other stuff you see at the front, so someone who wants to buy a (for example) decent NAD or Sony or Denon receiver is not prioritized. These stores get more profit from selling Beats headphones to go with the current Samsung Galaxy flagship cell than they do from other things. Not interested in a cell? Oh, here, we'll let.... Frank, yeah, we'll let Frank help you instead.
The problem with a lot of retail stores is that they are supposed to provide profit for investors, and the best way to do that is to sell with minimum amount of overhead. That means they won't pay for experienced sales personnel because it costs more. Apple and a couple of other companies are the exception because Apple has such an incredibly huge warchest of cash AND an incredibly loyal fanbase that they can afford to give you a truly fantastic in-store experience without the investors raising a stink about it. Turn Apple's profit margins into, say, Best Buy's (US big box electronics retailer), and you'll end up with the same result in the Apple stores as with Best Buy. Because the investors will demand more profit over quality, and personnel are the first thing to go.
Breaking this cycle involves companies deciding to invest in quality --and their people-- over the objections of their shareholders. And it also involves manufacturers preferring the in-store experience over the quick buck, which frequently involves a growing dependence on Amazon for their survival.
Sounds very similar to experiences I've had in recent years. I still want to try buying something in person but usually end up leaving the big box store empty handed and annoyed and wondering why I didn't just spend a bit more time looking online.
Same deal with trying to buy new graphics cards. The employees at the giant big box store are clueless and have no idea when they'll get them in stock or even when shipments tend to come in. Their websites have no queue system or bot protection. They dont even have a notify or alert system you can sign up for to get alerted of new stock arriving.
The only way to snag a card in store is to basically show up every morning and hope someone who did manage to buy one for in store pickup canceled. And even then you have to hope an employee didnt save it for themselves.
Then you have companies like EVGA who arent even a retailer but set up a competent online queue system and only allow 1 purchase per family but they cant keep up with demand and are still trying to fulfill queue orders from over a month ago.
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The only way to snag a card in store is to basically show up every morning and hope someone who did manage to buy one for in store pickup canceled. And even then you have to hope an employee didnt save it for themselves.
Then you have companies like EVGA who arent even a retailer but set up a competent online queue system and only allow 1 purchase per family but they cant keep up with demand and are still trying to fulfill queue orders from over a month ago.
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