Best Buy to close 50 stores by 2013 (1 Viewer)

[timschochet]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

It's not a mystery at all. They occupy 800-1500 square feet. They average 1-2 employees at any given time. Their expenses are extremely low. As regards their higher prices, it's just like a liquor store vs. a supermarket. People are willing to pay more because they can get in and out quickly. Never underestimate the laziness of customers when it comes to figuring out why certain retail businesses do well.

 

[Dexter]

So this $89.99 Monster HDMI cable is a good deal?

 

[TwinTurbo]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

Radio Shack has to be a front for some organized crime or something.I've not bought a single thing in that store in over 20 years...and every time I've found myself in there because I'm just wandering around or something...I see items that are 4-5 times it's cost online. I don't get it...never will.

They are like Best Buy, except with smaller stores, higher prices, worse selection, worse customer service, and an even worse name. I think their business model must be partially based on unredeemed holiday gift cards. It makes absolutely no sense how this company stays solvent.

 

[timschochet]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

Radio Shack has to be a front for some organized crime or something.I've not bought a single thing in that store in over 20 years...and every time I've found myself in there because I'm just wandering around or something...I see items that are 4-5 times it's cost online. I don't get it...never will.

They are like Best Buy, except with smaller stores, higher prices, worse selection, worse customer service, and an even worse name. I think their business model must be partially based on unredeemed holiday gift cards. It makes absolutely no sense how this company stays solvent.

Please read my post 2 above yours.

 

[TwinTurbo]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

Radio Shack has to be a front for some organized crime or something.I've not bought a single thing in that store in over 20 years...and every time I've found myself in there because I'm just wandering around or something...I see items that are 4-5 times it's cost online. I don't get it...never will.

They are like Best Buy, except with smaller stores, higher prices, worse selection, worse customer service, and an even worse name. I think their business model must be partially based on unredeemed holiday gift cards. It makes absolutely no sense how this company stays solvent.

Please read my post 2 above yours.

Tim, this isn't the 1980's anymore. There is no high margin market for radio controlled cars, hobby electronics, and Tandy calculators. Radio Shack basically had to reinvent themselves and move into the mobile phone business and close a bunch of those small, poor performing stores to stay afloat. But even that isn't working out and RSH stock is now at a multi-decade low. I am pretty sure this place is going to get hit even harder in the near future due to retailer competition from all sides in the mobile space and I'm just surprised they've last this long.

 

[Dickies]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

You aren't alone

 

[jwb]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

Radio Shack has to be a front for some organized crime or something.I've not bought a single thing in that store in over 20 years...and every time I've found myself in there because I'm just wandering around or something...I see items that are 4-5 times it's cost online. I don't get it...never will.

They are like Best Buy, except with smaller stores, higher prices, worse selection, worse customer service, and an even worse name. I think their business model must be partially based on unredeemed holiday gift cards. It makes absolutely no sense how this company stays solvent.

Please read my post 2 above yours.

Tim, this isn't the 1980's anymore. There is no high margin market for radio controlled cars, hobby electronics, and Tandy calculators. Radio Shack basically had to reinvent themselves and move into the mobile phone business and close a bunch of those small, poor performing stores to stay afloat. But even that isn't working out and RSH stock is now at a multi-decade low. I am pretty sure this place is going to get hit even harder in the near future due to retailer competition from all sides in the mobile space and I'm just surprised they've last this long.

I think Radio Shack makes their money by carrying every sort of plug / connector / wire / antenna (etc) you might need. The markup on that stuff is big, and they probably sell a surprising amount of it. And like Tim said - they operate lean.

 

[jwb]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

 

[DrJ]

Problem isn't necessarily their pricing - it's that they're completely unwilling to bargain in the slightest. On big ticket items I strongly prefer buying from someplace local rather than online, because I feel it'll be a lot easier to return if there's problems and things. I'm local to ABT, and they're willing to price match online prices. Best Buy is even more local and I've given them the chance before - last time I told them that ABT had already agreed to match a given online price but I'd buy it from them if they'd to the same. They told me I'd have to come in the store to discuss these sorts of things, so I've never even bothered trying since.

 

[bakes]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

The high school AV squad has to work somewhere...

 

[Good Posting Judge]

So this $89.99 Monster HDMI cable is a good deal?

 

[DrJ]

So this $89.99 Monster HDMI cable is a good deal?

Only if you're running an older 720p display. For the 1080 we recommend this one here that's rated at twice the speed.

 

[Premier]

So this $89.99 Monster HDMI cable is a good deal?

When I was looking for my tv, they tried to sell me some "cinnamon" and "chocolate" cable -- both were over a 150 dollars. I can't imagine who is buying that.

 

[Jobber]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

Radio Shack has to be a front for some organized crime or something.I've not bought a single thing in that store in over 20 years...and every time I've found myself in there because I'm just wandering around or something...I see items that are 4-5 times it's cost online. I don't get it...never will.

They are like Best Buy, except with smaller stores, higher prices, worse selection, worse customer service, and an even worse name. I think their business model must be partially based on unredeemed holiday gift cards. It makes absolutely no sense how this company stays solvent.

Please read my post 2 above yours.

Tim, this isn't the 1980's anymore. There is no high margin market for radio controlled cars, hobby electronics, and Tandy calculators. Radio Shack basically had to reinvent themselves and move into the mobile phone business and close a bunch of those small, poor performing stores to stay afloat. But even that isn't working out and RSH stock is now at a multi-decade low. I am pretty sure this place is going to get hit even harder in the near future due to retailer competition from all sides in the mobile space and I'm just surprised they've last this long.

I think Radio Shack makes their money by carrying every sort of plug / connector / wire / antenna (etc) you might need. The markup on that stuff is big, and they probably sell a surprising amount of it. And like Tim said - they operate lean.

This. I've bought at Radio Shack are capacitors, a soldering iron, and solder a few years ago. I guarantee you can't find most of that stuff at any other store around. But yeah I haven't set foot in one since. But I know it's there if I need some weird *** connector or something.

 

[Fensalk]

Yeah we've come full circle. Over a hundred years ago, mail order catalog was big business. The Sears catalog and the Montgomery Ward catalog were huge business. Brick and mortar stores were confined to major cities. Of course when the catalogs only get updated every quarter, its not as interesting as a store that get new goods in every day. So physical stores eventually took over.

But now, the internet essentially offers a catalog with video and its updated constantly. And that is better than a store in many cases.

 

[Andy Dufresne]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

Yeah. That's what I meant. But I'm glad to have given you a platform to pontificate.

 

[dickey moe]

Bought a TV on Amazon for $1800 (free shipping). Before I did, I went to Best Buy to see how the picture looked. Best Buy was selling the same TV for $2399. Can't imagine why Best Buy would be losing customers.

I did the same thing, but showed BB the internet price, and they matched it, and delivered it that day.

This is their only hope for survival.

 

[Mario Kart]

Bought a TV on Amazon for $1800 (free shipping). Before I did, I went to Best Buy to see how the picture looked. Best Buy was selling the same TV for $2399. Can't imagine why Best Buy would be losing customers.

I did the same thing, but showed BB the internet price, and they matched it, and delivered it that day.

This is their only hope for survival.

I think they are pretty much doomed. Too much overhead with employees and real estate leases. The Best Buy of today will have to look like the Radio Shacks of today. In smaller spots in malls or small stand alone shops if that is even viable. A name change to get away from the stigma that comes with "Best Buy" should be another option.Black Friday is all but dead if this place goes under soon.

 

[[icon]]

So this $89.99 Monster HDMI cable is a good deal?

When I was looking for my tv, they tried to sell me some "cinnamon" and "chocolate" cable -- both were over a 150 dollars. I can't imagine who is buying that.

Housewives.

 

[Jojo the circus boy]

Bought a TV on Amazon for $1800 (free shipping). Before I did, I went to Best Buy to see how the picture looked. Best Buy was selling the same TV for $2399. Can't imagine why Best Buy would be losing customers.

I did the same thing, but showed BB the internet price, and they matched it, and delivered it that day.

That's funny because I showed BB a link to their own website for a cable that cost 25% as much and they wouldn't match the price since that cable was an internet only deal.

 

[Dexter]

Yeah we've come full circle. Over a hundred years ago, mail order catalog was big business. The Sears catalog and the Montgomery Ward catalog were huge business. Brick and mortar stores were confined to major cities. Of course when the catalogs only get updated every quarter, its not as interesting as a store that get new goods in every day. So physical stores eventually took over.But now, the internet essentially offers a catalog with video and its updated constantly. And that is better than a store in many cases.

Never thought of that.

 

[Dexter]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

 

[Major]

Yeah we've come full circle. Over a hundred years ago, mail order catalog was big business. The Sears catalog and the Montgomery Ward catalog were huge business. Brick and mortar stores were confined to major cities. Of course when the catalogs only get updated every quarter, its not as interesting as a store that get new goods in every day. So physical stores eventually took over.But now, the internet essentially offers a catalog with video and its updated constantly. And that is better than a store in many cases.

 

[HellToupee]

I miss Lechmere Sales

 

[HellToupee]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

 

[Ursa M]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

To be a tad pedantic, it isn't "taxing the Internet" per se, it's leveling the playing field so that sales made in a given state are subject to the same sales taxes as for all other vendors. The original SCOTUS decision on sales tax only being applicable to companies with a B&M presence in a state was as shortsighted and stupid as their Kelo eminent domain and their Citizens United decisions, to name but two. To give a behemoth like Amazon a pricing advantage over companies that provide states with employment and business taxes is beyond ridiculous. And I speak as one that uses Amazon a great deal.

 

[timschochet]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Again, laziness and impatience are your keys here, particularly impatience. It would be one thing if you could order the item on your keyboard at home and it magically appears in your house. That's why the internet has destroyed bookstores and video stores. But electronic components are a different animal. When people want them, they want them NOW. They're not willing to wait even 2 or 3 days.Now it might make a difference if you have to go to a large Best Buy store, look for a place to park, wait for some customer service help, wait in a long line to purchase your item, etc. If you have to go through all of that, you might be willing to wait the few days or week that the convenience of never having to leave your home that the internet provides. But a small store like Radio Shack- if you know what you want, you're in and out in 10 minutes. The internet can't compete with that speed. And people are willing to pay considerably more to get things now.

 

[Premier]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

Absurd. Absolutely zero chance of happening. Amazon couldn't care less about sales tax. They will never open a B&M because they don't have to, and because there is no way they would want to pay the cost of building the stores, paying the mortgages and staff and other overhead. Why would they? The thought of it is insane.

 

[NajehHejan]

Odd to hear people get hassled non-stop in a Best Buy. My experiences at the stores by my work and house is you can NEVER find a customer service rep, and when you do, they're pretty much clueless. Their customer service is horrid. If that wasn't the case, I think they could survive the internet prices being better. I do feel badly for all those folks out of work though, even though they were smoking butts outside or hiding in the back when I needed them.

 

[Major]

Odd to hear people get hassled non-stop in a Best Buy. My experiences at the stores by my work and house is you can NEVER find a customer service rep, and when you do, they're pretty much clueless. Their customer service is horrid. If that wasn't the case, I think they could survive the internet prices being better. I do feel badly for all those folks out of work though, even though they were smoking butts outside or hiding in the back when I needed them.

Yeah, I think it depends on the location. They really stock up on reps at most busy/high revenue stores and it can be annoying. Go to a Best Buy in the hood and you won't be hassled.

 

[Major]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

Completely abandon all your strengths as a company and adopt a flawed model that worked in the past. Great idea, guy

 

[HellToupee]

Let me address this as someone with 20 years in retail commercial real estate:

Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically.

The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

Absurd. Absolutely zero chance of happening. Amazon couldn't care less about sales tax. They will never open a B&M because they don't have to, and because there is no way they would want to pay the cost of building the stores, paying the mortgages and staff and other overhead. Why would they? The thought of it is insane.

Why talk in absolutes? http://money.msn.com/investment-advice/article.aspx?post=e1c484c0-b834-46ed-b063-6033c1e3006e

Why Amazon retail stores make sense

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5

The online retailer may open a test boutique store, according to reports. You know, the idea isn't half bad.

By Kim Peterson Feb 6, 2012 5:27PM

Is Amazon (AMZN -1.03%) planning to open a brick-and-mortar retail store?

One digital publishing site is reporting that the company plans to open a test store in Seattle sometime this year. The company envisions a boutique-style store focused on selling Kindle e-readers as well as books from the Amazon Exclusives line, reports the Good E-Reader site. Amazon is not commenting on the reports.

Post continues below.

Some investors are bewildered by the news. Didn't Amazon make a big business by avoiding the traditional retail structure? Doesn't this go against everything the company stands for?

At one time, the answer might have been yes. But times are changing for Amazon. Here's why at least exploring a store makes sense:

1. Amazon now sells its own devices. It wants people to buy Kindle e-readers and the new Kindle Fire tablet, but it can't physically show them these gadgets first. People need to visit Target (TGT +0.50%) or another retailer that carries Kindles, or they need to know someone who owns one. People want to play with one before buying, and this would help Amazon's sales.

2. Amazon needs to provide tech support. When my Kindle began having problems, Amazon couldn't help me much on the phone. The company simply replaced the Kindle instead of trying to work through the problem. If Amazon had a product store with its own version of Apple's (AAPL -1.69%) Genius Bar in the back, it might be able to cut down on replacement costs by helping customers through their technical issues.

3. Amazon needs a place for its own books. The company is becoming a publisher with its own line of exclusive books. But it's having a devil of a time selling those books through traditional retail channels. Rival Barnes & Noble (BKS -1.12%) says it won't sell books published by Amazon in its stores. Amazon needs a place where it can showcase its books to readers.

4. Taxes are becoming less of an issue. States are getting mighty tired of residents ordering from Amazon in order to skip paying sales tax. Amazon will begin charging California residents a sales tax this year. Texas sent the company a bill worth millions of dollars for unpaid sales taxes. Setting up a retail store in any state would require Amazon to begin collecting sales taxes from all residents in that state. Amazon normally would shy away from this, but states are going after the company regardless.

Amazon has been rumored to be opening its own retail stores for years. The company even received a patent in 2009 for a storefront-type building that some thought would lead to physical locations.

If Amazon.com opens physical retail stores, this would be a great place to start

February 6, 2012 at 12:13 am by John Cook 11 Comments

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University Village. Photo via U Village

Could this be the year that Amazon.com opens brick-and-mortar retail stores? Well, if the Seattle online retailer were to buck tradition and give that a shot, something that The New York Times recently speculated about, here’s the perfect location for them: the former Barnes & Noble at the University Village shopping mall.

Barnes & Noble shut down the Seattle store in December, leaving a big hole smack dab in the middle of the popular outdoor shopping center.

Now, we’ve heard nothing about whether Amazon actually plans to open any physical stores this year or in the future, let alone one at U Village. (The company is typically close-lipped about any sort of plans like this). UPDATE: Good-e-Reader reported this past weekend, citing sources close to the situation, that Amazon was kicking around a smaller-scale, boutique-style retail store in Seattle where it could sell Kindles as well as book titles from its own publishing line.

Nonetheless, if Amazon were investigating a brick-and-mortar retail strategy of any size, U Village would make a heck of a lot of sense.

Consider this:

–Amazon already collects sales tax on purchases made in Washington state, so a physical retail presence in Seattle would be easier for Jeff Bezos and crew to stomach.

Amazon could use retail stores to tout its new line of tablet computers

–Amazon has shown a tendency to test new concepts in its hometown, from the Amazon Fresh grocery delivery service to the recently-launched Amazon Locker service.

–Taking over (a portion) of the retail space of a rival in Barnes & Noble could have a certain allure, especially as Amazon looks to tout its own line of tablets and e-readers. (See comment below).

–David Streitfeld at The New York Times notes that the diversity of products sold via Amazon.com would mean that any store would have to be big, and the former Barnes & Noble space does not disappoint coming in at 46,000 square feet, with about half of that currently available.

–Apple, Microsoft and Sony all have retail stores in the shopping center, and Amazon could make a big statement by planting its flag near them.

–As Amazon.com adds more of its own products — including publishing books — the company could use a retail presence as a flagship store to market items in new ways.

I am not a betting man, but I’d wager a guess that a least a few folks in the halls of Amazon.com are kicking around these ideas. University Village general manager Susie Plummer told the Seattle P-I in December that they would love to have a book store at the shopping center.

Might Amazon be the one?

We will just have to wait and see what happens on that front.

 

[HellToupee]

Let me address this as someone with 20 years in retail commercial real estate: Andy is wrong. The end of retail is not near. The end of big box retail is near. 20,000-30,000 square foot tenants are a thing of the past. There will be new "Best Buys", or their equivalent, but they will be 5,000-10,000 feet. The inventory will be downsized dramatically. The internet is not destroying retail. But what it's doing is returning retail to what it was 20 years ago, before most of the big boxes arrived. The big boxes can be seen as a 10 year bubble, and that bubble is winding down. This of course is very unfortunate for property owners who had big box tenants paying the bulk of their rent. They're going to have to revamp their centers or they're facing a total loss. But the owners of smaller shopping centers with lots of small tenants on signaized corners- these guys are going to be better than ever.

How does a small store compete with internet pricing? Not only are we talking about lower prices but no tax(which I'm 100% positive is ending soon). Wont these small stores just become show rooms too?

Once the internet is taxed Amazon will enter the B&M realm

Completely abandon all your strengths as a company and adopt a flawed model that worked in the past. Great idea, guy

Thanks!http://www.launch.co/blog/rumor-amazon-retail-stores-coming-predatory-pricing-channel.html

By Jason Calacanis Just heard an interesting piece of gossip from a very credible source: Amazon is going to open retail stores and will start making its own branded merchandise.That would seem absolutely insane if we hadn't witnessed Bezos doing the following insane -- and wildly successful -- things:1. Explode the tablet space by offering a below-cost $199 tablet.2. Explode the video space by giving Amazon Prime subscribers instant streaming of 10K+ free movies and videos.3. Explode the book space by giving Amazon Prime subscribers 5K loanable ebooks for free.4. Explode the shipping space by offering folks free, unlimited two-day shipping for an Amazon Prime subscription of $79.5. Destroy the hosting business by offering servers by the hour on EC2. This rumor has been out there before, and of course Amazon has played with same-day delivery and local groceries in the form of the defunct Amazon Tote and the still-going Amazon Fresh services. Let's assume the rumor of Amazon launching big, Costco-like stores is true. What would it be like for folks in Oakland, Los Angeles or New Jersey to drive to a huge mall complex, past Target and Walmart and into an Amazon store?The first scenario: the store could just be a showroom with display units of appliances and "geniuses" running around showing you the top 25 vacuums in action. Or the top 10 juicers actually making juice.It could be Consumer Reports meets the Apple Store on crack!There wouldn't have to be any inventory, you would simply play with the stuff, talk to a professional and swipe your Amazon Prime credit card (or Amazon phone) and have it at your house in the next 24 to 48 hours.Remember, Amazon has been experimenting with same-day delivery in some markets with some items. And no inventory might solve its sales-tax problems. I mean, do you have to pay sales tax if you're selecting the product in the store but technically buying it on your tablet?Tax certainly is going to be a big consideration here.Second, Amazon could keep small items like books, DVDs and electronics on site for instant gratification. If you like the pulp, you could buy a copy of a physical book and get an ebook sent to you.Third, Amazon could entice you into the space with a physical library.Yes, Amazon could buy up used DVDs and books and just have them there for unlimited use by Prime subscribers. Ever go to the local library and try to borrow a popular movie or CD? Exactly, the selection is pure garbage.Unlike digital assets, which require consent of publishers to loan out (thus the small number of books in Amazon's Lending Library), you can rent out used DVDs and books all you want as long as you bought them. That was the magic of Netflix's by-mail model, and the kryptonite to their streaming service, which suffers from a serious lack of inventory. Fourth, if Amazon is pulling a Walmart and gearing up to make its own products, it would have even more leverage over pricing of top brand products. What if you make designer diaper bags (yes, we buy awesome Skiphop stuff all the time) and Amazon starts knocking off your work? What if Amazon only keeps inventory at their stores of its own cheaper stuff, relegating your stuff to being only available for delivery? What's the consumer going to do: take the Amazon-branded stuff right now at 20% off or wait two days for a better product?Bezos gets off on destroying channels.So did Steve Jobs with the soup-to-nuts iTunes ecosystem -- which, as I told everyone four years ago, would include a TV.Under Larry Page's vision it's clear Google is going to make entire ecosystems: from the Chrome AND Android Operating Systems to the App Store and on to Motorola mobile phones and tablets. And from Google TV devices to YouTube, which is now funding content creators.The name of the game is f@#$k the channel. Jobs didn't care what anyone thought about him taking every ounce of value from the music channel, from hardware to content, and it's making everyone bold.Heck, Google bought Zagat!Don't be surprised if Google buys the New York Times some day and says it's not content, it's a platform! All Google would have to do is make all the writers freelancers with revenue sharing and turn the editors into "curators" to keep up the illusion that it's not a media company!What's amazing about Bezos' run of disruption is that he's doing it all with massive predatory pricing.Technically, isn't selling a product like the Kindle Fire for less than it's worth illegal? If you are doing it to create a monopoly it is, and that's why Amazon is doing it. But Amazon is not creating a monopoly in tablets -- it's in shopping!Is giving away 11K movies, 5K books, free two-day shipping and selling a tablet at a loss predatory pricing? What if you add retail stores with libraries and white-labeled product sold at a loss or break event?Probably not, but maybe (if you intend to kill competitors).Either way Amazon's behavior is awesome for consumers.Now this does suck for Walmart, but no tears for their billions made off the backs of crushing the mom-and-pop industry. How awesome would it be to watch Walmart be Walmarted by Amazon anyway?!Love it!Go crush 'em, Jeff!Google is giving away Android, GMAIL, Google Docs, Chrome OS and the Chrome Browser in order to drive AdWords revenue and stick it to Microsoft and Apple.Should that be illegal, too?I hope not because I love those products!Business is just too complex today for the government to stop product dumping. Certainly they can't stop it if it is benefiting the consumer -- and it clearly is.Why should we care if big companies want to make one side of the business operate at a loss -- be it the the Kindle Fire, Chrome or Facebook's new phone -- and make it back on another product line?In today's world, the way to know if you're winning is how much of the ecosystem's revenue you're destroying. I mean, Airbnb and Dropbox are seriously disrupting entire ecosystems in hospitality and IT. The number-one thing the IT business does is set up email and file servers. Email is all in the cloud by Google for free and file sharing is free by Dropbox. Who needs an IT person?!We're entering the Galactus phase of company building, where entire galaxies are appetizers.

Amazon has white-label products -- but it's hiding them.Following up on my piece last night, Dan Gillmor [ @dangillmor ] told me that Amazon had started creating its own products under the "AmazonBasics" brand. I was shocked, as every week five Amazon boxes come to our house with everything from soy milk to batteries, and obviously tons of electronics.It turns out that one item I just ordered, a slick car charger with two USB ports, is being offered by Amazon under its own name. Why didn't I see that when I searched for it? Did I miss it in the search results and the related products? So I searched Amazon for "double usb car charger" again, and after looking through page after page of search results, I couldn't find the Amazon product. I added "amazon basics" to the end of my query and it didn't come up. Nor did it come up in the related and people also bought/searched for widgets on the page of the product I bought. However, if you search for AmazonBasics you'll find it as the 23rd listed item. Why is Amazon taking the time to rewrite its search algorithm to remove its own products?For background, Amazon first launched AmazonBasics in 2009 as a private-label electronics brand. When the program started, it offered only USB and A/V cables, ethernet cables and blank recordable media. Now, AmazonBasics features electronics accessories like mice, keyboards and tablet covers at prices typically at least 10% lower than brand-name products. For instance, Amazon sells a wireless mouse with a nano receiver for $16.75 while Logitech sells a similar mouse for $18.01. No one really talks about it, in fact a search of Google News found only one story from a scraper/spam site mentioning AmazonBasics. Someone claiming to be a developer at Amazon wrote on a message board that Amazon has two hidden house brands: Pinzon for kitchen and Strathwood for homes. Why wouldn't Amazon just brand those Amazon? Oh yeah, the name Pinzon is based on that of a Spanish explorer who, wait for it, discovered the Amazon River. Cute.It's worth reading the Pinzon and Strathwood descriptions: These business have been around a long time, but it's really opaque that they are owned by Amazon. What does "Strathwood offers stylish, high-quality furniture, décor, and more. Sold exclusively through Amazon.com" mean? To me that says Strathwood is a stand-alone company that Amazon has exclusive rights to. Of course, the reality sounds like Strathwood is a house brand Amazon doesn't want you to know is a house brand. Sneaky. Very."Invite Amazon.com's Pinzon products into your kitchen and home for their form and function, and experience their style, craftsmanship, and value" sounds slightly more like an Amazon brand -- but it's only marginally clearer. Why not say these are Amazon brands? Why would Amazon go through the trouble to both make and expand its own product line then not only not promote it but take the extra step to hide it?There are two possible answers here: First, Amazon is on the fence in some way about these white-label businesses. Are they worth pursing for the negative regulator attention they will certainly bring? What about the bad will from competing brands? There is probably a big debate going on over this at Amazon's HQ -- but not in Bezos' mind.Bezos is an inevitable-ist, and more than willing to be the future -- even if it is painful. Second, Amazon is lulling the products industry to death -- like they have lulled the book publishers to a certain death -- and they don't appreciate anyone putting a spotlight on these efforts. It's amazing to me that Amazon's new competitors, like the book publishers and product creators, are not absolutely up in arms about Amazon's tactics. I mean, if you're a maker of tablets, should you really be supporting Amazon in any way? Their goal is to nuke the entire tablet space. Perhaps the new crop of competitors is so scared of pissing off Amazon that it's willing to watch their businesses slowly get pulled out from under them. These competitors are just flies in Amazon's web. They're fracked.First they got caught in the web, then they got paralyzed by the venom. Now they're being wrapped up in the webbing, and tomorrow their liquefied remains will be sucked up by the industry's new tarantula.I love it. Bezos takes all.Bezos is the new Jobs.I for one salute our new overlord. Pass the (Amazon-branded) venom! Drink up!

 

[Politician Spock]

At yet somehow Radio Shack is still around. One of greatest mysteries I will never understand is how Radio Shack stays in business.

It's not. RadioShack closing 1,100 stores.