Sometimes it really is hard to see the forest for the trees.
As students of CE retail, it’s all too easy to get caught up in the micro-drama of the moment. Yes, hhgregg needed a deeper management bench to match its grand ambitions. And yes, any store besides an antiques shop whose name begins with “radio,” and is still best known for selling parts, is sure to have issues in the 21st century.
However, there’s a much larger story here, with more powerful forces at play. While we’ve addressed it tangentially in our Amazon analyses, Q4 coverage and Top 100 Retailers reports, two recent articles, one by a civilian and the other from the mainstream media, remind us of the profound restructuring that’s reshaping the entire retail industry.
We urge you to read them both.
The first, by a member of The Plain Dealer’s editorial board, is an elegy to, and reprimand for, the disappearing independent dealer.
In it, author Ted Diadiun provides a first-hand account of B&B Appliance, a two-store NECO dealer outside Cleveland that’s closing its doors after 93 years. Once a thriving $25 million business, it last appeared on TWICE’s 2014 Appliance Retailers Top 100 at No. 96, with $11 million in sales.
“The bottom line,” president Jeff Blumental told the newspaper, “is that we are no longer profitable.”
Diadiun places the blame on a friend, and tens of millions of consumers like him, who showroomed multiple camera shops before making a purchase online, in order to save $20.
“What would happen if everyone went to their local shops and stores where they could examine the things they wanted, talk to the salesfolk, touch the merchandise and compare — and then, to save a few bucks, went online and bought it there?” he wrote.
“I don’t know if those camera stores that gave my friend enough information to make his online purchase are still around. I’m guessing both the stores and the 20 bucks he saved are long gone.”
He went on. “But I do know that the next time I’m looking for an appliance, I’m going to miss the reassurance that I’m buying it from a guy who knows what he’s talking about and can impart that wisdom to me. And I’ll get mad all over again at my friend and people like him.”
Cut to a recent New York Times piece about “America’s retail transformation.” In it, the authors recount how the Amazon-ization of shopping and an over-stored retailscape have led to bankruptcies and zombie malls.
But rather than spelling the end of brick-and-mortar, it merely marks a new beginning, as service-intensive luxury retailers like Pirch and Starpower, and creative, engaging and immersive showrooms like those of Abt Electronics and Video & Audio Center’s Westfield Topanga store, represent the wave of the future.
Indeed, Abt co-president Michael Abt once compared the in-store experience to a visit to Las Vegas. “We go to Vegas every year. If you just look around, this place is entertaining,” he said at a 2014 TWICE Retail Roundtable . “It’s a fun, fun place to be for most people for a few days. So for the hour or two that they stay in your store, we try to provide an exciting experience. People like coming into a great retail store.”
Abt Electronics’ Inspiration Studio
Addressing the service element, Peter Weedfald, Sharp Home Electronics’ sales and marketing senior VP, made a more elementary comparison: If the corner pizzeria can make, bake and deliver a pie within 15 minutes, he argued in a recent TWICE column, why can’t the local tech shop deliver a pricier, packaged device in the same time or less? Or even offer a complimentary snow removal or comparable home service to its very best customers?
Perhaps therein lays specialty retail’s not-so-secret sauce, and the tech and appliance industries’ ultimate salvation.