Another retail bankruptcy
Keith writes that—
Belk’s, the regional clothing retailer, has filed for bankruptcy, and will reopen with fewer stores. Retail stores have been in trouble for over ten years, well before the pandemic put the final knife in more than a few. There have been three principal causes over time that have overlapped and continue:
– Retail malls were over built to the extent we have many thousands of unneeded malls just in this country. Rather than improve a mall, new ones were built, often cannibalizing on existing markets for the stores.
– Walmart had a significant impact on retail stores, leading the way for the other discount retailers to eat away at margins for others. When Walmart came to town, other retailers went away.
– Online ordering put brick and mortar stores on notice and many out of business. The ones who survived, blend online with in-store purchasing, better than others. Even Walmart was harmed by the online effort and had to react.So, the pandemic comes along and those store franchises that were teetering, fell down. There will likely be more bankruptcies in the future. All stores must now compete against cheaper and easier online sales. Those store franchises with better customer service models stand a better chance at survival, but all are at risk, unless they can embrace online sales along with in-person sales. Nevertheless, COVID has put a damper on in-person sales and will continue to do so.
When I think of Belk’s, I think of my grandmother who worked there for years in a small town in Georgia. She worked for a local retail company that sold themselves to Belk’s. She ran the children’s department, then later ran the men’s clothing department. Many of her customers truly grew up with her.Her favorite story was the day Mr. Belk came into the store. He toured the store and needed to borrow my grandmother’s pen, which he put in his pocket by mistake. My grandmother said, “Mr. Belk, that is my pen. My boss is to cheap to buy us pens, so if you want me to do my job, you need to give it back.” It should be noted her boss was standing right there.My grandmother was all about relationship sales. Her customers would come back after college and ask for her to outfit them in new suits, since they trusted her. And, that is why retail stores do have a market when done right. Relationships. Trust. Customer first. Yet, if they don’t get the technology end right, it will be for naught.
Keith Wilson: Musingsofanoldfart.wordpress.com