Quote:
Originally Posted by Rain Man
When I was a kid living in rural middle America, the big three were Sears, JC Penney, and Montgomery Wards. Apparently that business model doesn't work any more.
The thing that's somewhat ironic is that Sears and Wards were to some extent a primitive version of Amazon. They sent you a catalog, you called in your order, and then they had a warehouse-type place where you went to pick it up. That's pretty much exactly Amazon's model, but Amazon has the internet. One wonders why the classic catalog stores never got ahead of the curve.
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I don't know what happened at those companies, but at Cabela's, they had about played out the direct business and growth had plateaued. Meanwhile, their few retail stores were profitable and there was some regional carryover where the retail stores were. So they rolled out a really aggressive retail plan, primarily just to get in front of more customers.
Then 2008 happened (kind of. It really started when gas prices spiked in 07 and they were sensitive to the effect of gas prices on their destination stores, but 2008 really wrecked shit) and suddenly these big expensive buildings were well, expensive.
I would anticipate similar things happened in the mall scene. Get a big retailer to come in, give them some tax breaks (Cabela's was working the property tax angle pretty hard), and you can get your direct products in front of a lot more people for relatively cheap. I can see how a company can think that a cost of sale would be cheaper in retail when malls got absurd traffic than printing and postage. Then this damn internet makes it cheaper for the direct sales again.
Now, Cabela's was asking their people to drive and their website drove a lot of traffic, so that added a different element to the fall of retail, but I can see it.
Innovation is hard, man.