Another Retail Chain Store Gone in Kona

What is going on with our national retail chains? We’ve lost Radio Shack and Sports Authority in the past year, and Payless Shoes will follow soon. Sears, in its corporate filings, says its long-term viability is questionable. They own K-Mart, so that, too, is in peril. The current Ross building in Kona was made for a Circuit City store: it never opened.

These are the brands I grew up with. I remember the joy of going school clothes shopping at Sears and K-Mart as a little tyke. When I was a teenager, I bought my first CD player at Radio Shack. I even worked a summer in a Radio Shack store, and had a great time playing with all the gizmos and gadgets when the store was empty.

The reality, however, is that all these stores hold a place in my memory from thirty-plus years ago; I have shopped these stores very little in the past 10-20 years.

The simple answer, the one we hear from the management of these stores is that online and over-capacity in retail are responsible for their demise. These are certainly true and are a big reason why some big box and specialty retailers are failing, but is there more?

I think there is.

Here’s why I shop online:

  1. Selection. Radio Shack in Kona would have—at most—a few choices of keyboards, speakers or any other gizmo I wanted to buy. Amazon has tens of items in each category. I always felt like I was compromising by settling by selecting among the few choices available at Radio Shack.
  2. Information. In the old days, you would rely on the salesperson’s recommendation. Nowadays, I can use the reviews of hundreds, and sometimes thousands, of consumer when looking at the products online. I trust the crowd to steer me right. Most chain retailers control the information, and that’s just unacceptable in this day and age. There is even a car dealer in Kona that blocks cell phone signals at their dealership to decrease the information available to consumers. Because of this, I took my business elsewhere.
  3. Price. Just this morning, I was looking at a wall mount for a television. The one I liked was $55 at the local big box store; I found a better one online for $28, including delivery.
  4. Time. My time is very valuable to me. If I can order a product in five minutes online, that’s at least 25 minutes of time I save if I have to go to a local big box retailer.

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Is there any hope for chain stores and big box retailers?

Of course there is. Stores like Wal-Mart and Target offer a lot of goods that just don’t make sense to buy online (toothpaste, frozen pizzas, alcohol, and various sundry items), items that sell best when the consumer can see the product (clothes, fabric, shoes) and things that are needed right away (a toy for the tots, spaghetti sauce or a quart of oil). These big box stores—Wal-Mart, Target, Lowe’s and Home Depot—do things well, for the most part. Their selection is good and all four have done a good job of integrating delivery to stores and real-time inventory on their digital platforms.

The trend toward online sales and the subsequent demise of specialty chain retailers is inevitable and will continue. Consumers have changed. Technology has enabled unparalleled access to information. Technology has also created immense efficiencies in the supply chain and distribution systems of Amazon, creating huge barriers to competition.

If I were a betting man, I would bet on K-Mart, Macy’s, Office Max and at least one of our chain automobile supply stores, being in peril in the next handful of years. They can, of course, pivot their business strategies and maintain relevance long into the future.