Do you remember the days of shopping at chain stores? The announcement by Radio Shack that it filed for Chapter 11 bankruptcy protection last week is a reminder that the innovation in the marketplace is constantly changing how we shop and how we get the goods and services we want.
Our grandparents sometimes lament the days when they shopped at individual mom-and-pop stores for their grocery needs. They bought fresh meat from a butcher, vegetables from a grocer and got their shoes mended by a cobbler. We on the other hand grew up going to chain stores like Radio Shack and Wet Seal or all-in-one box stores that tout the convenience and savings of shopping under one roof like Target and Wal-Mart. Now, we’re seemingly swinging to a hybrid model of Wal-Mart neighborhood stores in urban areas.
In a nostalgic look at retail chains that have disappeared over the years, CNBC flips through some of the stores that we flocked to for Christmas shopping but have all since disappeared.
What’s driving the disappearance of chains like Radio Shack, Blockbuster, or even teeny bopper stores Delia and Wet Seal? Changes in consumer behavior. Gone are the days of going to a store to rent a limited number of DVDs when technology now allows you to stream unlimited movies or TV shows right to your television. Similarly, a trip to Tower Records to sample and find new music is no longer necessary as iTunes and music swapping services deliver curated options on your Smartphone.
Some of the changes have nothing to do with technology but consumer taste. Teens and young adults are no longer craving the over-priced brand names from a decade ago such as Abercrombie & Fitch. International chains like H&M, Zara, and Forever 21 offer cutting-edge fashions at deeply discounted prices at all times. Its cooler to make a social statement than it is to promote a brand name. Companies that built their businesses on name brand are now struggling to stay afloat.
While we may mourn the store closings of our past and the lost retail jobs from cashiers to store managers, our changing shopping patterns create new opportunities and jobs in different industries.
Forbes provided interesting analysis from a year ago that is just as true today as it was last February:
Today’s consumers lead busy lives and shopping takes time. Often it is a task. Consumers find researching and shopping on the Web far more convenient than brick-and-mortar visits. Although in-store excursions can still be fun, in many ways shopping online or via a mobile device offers a better overall experience, whether from the couch after the kids are in bed, on a mobile phone during a quiet moment at lunch, or on the go.
In many instances, customers have access to more information online than when talking to an in-store sales associate. Online reviews and price comparisons enable them to feel more confident in their buying decisions and free shipping offers are a fixture of the online marketplace, especially during the holidays. Returns have even become easier than ever before.
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As consumers increasingly engage digitally and make fewer trips to stores and malls, there are serious questions about how brick-and-mortar stores that were once the center of consumerism will transform. Certainly retailers may close underperforming stores and consolidate locations, but more fundamental changes also must occur…
Retail is in crisis. But it’s a crisis that can stimulate transformational change. Retailers who understand their customers, leverage technology to evolve the customer experience, and focus on their differentiators and assets have the opportunity to thrive. However, for retailers that ignore opportunities for transformation, the writing is on the wall.
Right before our eyes is the demonstration of the unseen hand of creative destruction driven by innovation. Old ways of business are replaced by new methods that in aggregate make the consumer and the economy markedly better. It forces companies to compete by innovating or being left behind. It means that we customers get more and better of what we want.