Author Topic: Bifurcation of Retail  (Read 1408 times)

Jurgis

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Re: Bifurcation of Retail
« Reply #10 on: May 21, 2020, 02:46:41 PM »
The high end and low end are doing just fine.

Neiman Marcus is not high end enough anymore?
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
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Gregmal

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Re: Bifurcation of Retail
« Reply #11 on: May 21, 2020, 02:59:24 PM »
High end doesnt really matter if you dont differentiate your brand. Whereas a handbag maker can have a following, being a seller of generally expensive stuff isn't unique. Is there any real difference between Neiman Marcus, Lord & Taylor, Nordstrom, etc? They sell the same things as everyone else in their competitive peer group(and often competitors within the same damn mall) so what reason to people have to go there?

I'd probably even think it worth exploring how Barnes & Noble was able to transition some of its stores into cafe style libraries, hold social events, host clubs, etc, with reasonable success. Again, improving the customer experience.

ERICOPOLY

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Re: Bifurcation of Retail
« Reply #12 on: May 21, 2020, 03:04:44 PM »
High end doesnt really matter if you dont differentiate your brand. Whereas a handbag maker can have a following, being a seller of generally expensive stuff isn't unique. Is there any real difference between Neiman Marcus, Lord & Taylor, Nordstrom, etc? They sell the same things as everyone else in their competitive peer group(and often competitors within the same damn mall) so what reason to people have to go there?


Nordstrom stands out for service.

Spekulatius

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Re: Bifurcation of Retail
« Reply #13 on: May 21, 2020, 03:47:08 PM »
Retail is still - price, selection, convenience.

Those that are doing well, Costco, Walmart, Target,  TJ Maxx, Ross Stores, Burlington, Five Below all provide goods at very low prices for those particular segments.

Amazon wins on all three respects on many items.

Macy's, JCP, Bed Bath and Beyond, J Crew, Abercrombie, are not doing well in any one these respects. Previously for some mid-quality brands these used to offer a good combination of price and selection in a reasonable convenient way (mall). Now all that is gone.

Employee pay, ambiance, etc I think are more of secondary effects.

Vinod

You have to do something for your target customer really well or you are dead. The department stores are victims of their own mediocracy since they donít do anything particularly well. I would even say most mall retailers fall into the same bucket. The Competition of most segmented retailers in a mall are not influencers with a website on the internet or online only retailers.
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kab60

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Re: Bifurcation of Retail
« Reply #14 on: May 21, 2020, 10:33:50 PM »
It will be interesting to see whether this acceleration of mall and B&M deaths will be a major tailwind for succesful retailers like Ulta Beauty. They might lose some competition while landlords lose leases and thus rents might be lower for longer.

rb

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Re: Bifurcation of Retail
« Reply #15 on: May 22, 2020, 05:23:51 AM »
High end doesnt really matter if you dont differentiate your brand. Whereas a handbag maker can have a following, being a seller of generally expensive stuff isn't unique. Is there any real difference between Neiman Marcus, Lord & Taylor, Nordstrom, etc? They sell the same things as everyone else in their competitive peer group(and often competitors within the same damn mall) so what reason to people have to go there?

Nordstrom stands out for service.

I do like Nordstrom. But I do feel like the stuff is a tad on the expensive side. But maybe I'm just a tad on the cheap side.

rb

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Re: Bifurcation of Retail
« Reply #16 on: May 22, 2020, 05:32:38 AM »
The high end and low end are doing just fine.

Neiman Marcus is not high end enough anymore?

Not sure about Neiman Marcus. Never shopped there. Maybe, as others have said, it had something to do with service differentiation. Why would you get a Prada shirt at Neiman Marcus instead of going to Prada?

On the flip side there is an retail chain in Canada called Harry Rosen. High end men's clothing. Only men. I love those guys. If I want a Prada shirt I totally would buy it from them instead of a Prada boutique. Excellent service and none of the snobby pretentiousness that you get in some of these places.

So I would say that it's not all macro stuff. You also have to run a business. Your competitors are out there looking to eat your lunch. Yeah, retail is tough.

Jurgis

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Re: Bifurcation of Retail
« Reply #17 on: May 22, 2020, 06:22:20 AM »
So I would say that it's not all macro stuff. You also have to run a business. Your competitors are out there looking to eat your lunch. Yeah, retail is tough.

Definitely this.
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

SharperDingaan

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Re: Bifurcation of Retail
« Reply #18 on: May 22, 2020, 08:28:38 AM »
Talk to your significant other .... 'shopping' is primarily entertainment.
The utilitarian stuff (groceries, gas, etc) is just that - utilitarian. Bought on price (Walmart/ Costco), minimum in/out hassle (parking, self check-out, etc), convenience (groceries-to-go. on-line, etc).

What's more entertaining? strolling an enclosed mall, or strolling the street-front?
If you thought mall, you're out-of-touch. YESTERDAY'S teenagers went to the mall for entertainment. TODAY, they are mother's/grandma's, and meet for coffee at that sit-down street-front coffee shop - the price of the coffee is about the same; the entertainment experience? completely different.

The chain-stores mentioned are primarily creatures of the mall, and 'mall culture'
Business models that are out of date, inability to evolve with the times, and collapsing under their own weight - long overdue. Put the space to higher and better use.

Technology is great, but value still prevails.
Common practice at many grocery stores; is to shop/pay on-line at the grocery store price, and pay $5 for drive-by store pick-up. $10-15 for timed at-home delivery, inclusive of orders from the store hot buffet. Both Friday-night dinner, & the week-end grocery shopping - reliably wrapped up for $10-15. Value.

Think about how you, and your parents/kids, actually shop? versus what is available in your area.
Bifurcation is primarily generational, the shopping 'delivery format' just reflects each generations preferences. Fewer people, buying fewer goods, at lower margin - and the mall dies.

SD

« Last Edit: May 22, 2020, 08:37:47 AM by SharperDingaan »