
Hard Lessons Breathe New Life Into Retail Stores - gk1
https://www.nytimes.com/2018/09/03/business/retail-walmart-amazon-economy.html
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no_wizard
One could look at Apple and it’s retail stores of the exact phenomenon that is
making retail stores important again with the caveat of _the stores must
significantly differentiate itself on some basis relative to competitors_

Stratechery has a great write up in this (albeit a few years old, it’s still
largely applicable)

 _It’s that last example that resonates when talking about retail especially.
To buy a designer bag is an event: you’re greeted at the door, given a drink,
have an attendant on hand at all times (who will model the bag for you, if
need be); if you purchase it’s almost like a ceremony, complete with special
packaging, congratulations (for them taking your money!), and perhaps a
follow-up call a day or two later. Obviously given its scale an Apple Store
isn’t quite the same, but it’s in the ballpark, especially relative to the
buying experience for most electronics. Moreover, it’s the after-sale
experience that is arguably the best part: you’re given help setting up your
new device, transferring files, invited to classes to learn how to use your
purchase, and assured that a genius is ready-and-waiting to take care of any
problems that arise_

[https://stratechery.com/2014/apple-stores-innovators-
dilemma...](https://stratechery.com/2014/apple-stores-innovators-dilemma/)

~~~
scarface74
Apple isn’t selling low margin products and while its stores are very
profitable, it has never been solely focused on profit and loss. It is almost
a marketing tool.

Tim Cook fired one chief of retail store operations within six months after he
realized that the guy didn’t get that.

~~~
mprev
As an aside, that was a startling hire in the first place. Curry’s electronics
stores, at the time, were the polar opposite of the Apple Store experience.

~~~
Marazan
John Gruber trying to convince himself at the time it was a great hire was
hilarious.

A completely inexplicable decision.

~~~
kovek
Where do we hear about these stories? Did people interview Gruber and were
these interviews published? Was it on the news?

~~~
SyneRyder
I think they're referring to Gruber's blog on the hiring at the time (and
maybe his podcast & Twitter, but that's harder to search):

[https://daringfireball.net/linked/2012/01/31/browett](https://daringfireball.net/linked/2012/01/31/browett)

 _" You don’t see many executives trading up from CEO of one company to senior
vice president of another. That Browett is from Europe is a pretty good signal
that international expansion is a top priority for Apple retail."_

He was already hedging his bets a couple of days later, though:

[https://daringfireball.net/linked/2012/02/02/dixons-
sucks](https://daringfireball.net/linked/2012/02/02/dixons-sucks)

 _" I'm not implying that Browett was hired to or intends to Dixons-ify the
Apple Store experience — just pointing out that it’s a curious hire, also
given how rarely Apple hires executives from outside the company."_

~~~
scarface74
The first quote wasn’t really complimenting Browett. It was more of a
statement that for someone to take a “demotion” from being a CEO to VP says a
lot about the Apple store.

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mjevans
Physical stores also SHOULD have a benefit that Amazon seems to have no will
to address.

Quality control.

If you do have an item through a retail store with a physical presence, not
only should (common) items be there at any time, they should also be of actual
durable quality.

~~~
NullPrefix
I can't follow the point you're trying to make. Are you suggesting that retail
employees could inspect the merchandise before giving it to the customer?

~~~
esaym
That's not the point. Retailers use a known supplier for their products.
Amazon uses any one and anyone else (3rd party) can sell on amazon.

Common products that are normally sold at a high mark-up at retailers, are
usually always counterfeit if bought from amazon. Case in point are the
expensive electric tooth brush replacement heads by Oral-B.

You will pay $5-$8 per head from a physical retailer. Yet on amazon, there are
tons of them being sold for much less. If you do buy one from amazon, the
product will not be the same as from a physical store even though the
packaging is identical. Its a cheap counterfeit.

Another time, I bought a hand cranked can opener. It was supposed to be a
heavy duty "Made in America" can opener. Yet once I got it, the construction
was nothing at all like the product images showed (was held together by cheap
pop rivets instead of solid rivets) even though all the brand markings
(including a big print "made in America") were there. It broke quickly.
Looking on ebay I discovered an identical item only instead of it have a
printed "made in America", it said "China"...

~~~
fashionrob
Huh? There are genuine Oral B and Phillips heads on Amazon.

~~~
Buge
Have you bought them?

~~~
jhou2
I’ve bought both the brand name and cheaper knockoff Oral-B electric
toothbrush heads. Haven’t been able to distinguish them yet in terms of
quality and performance. YMMV.

------
jseliger
_“These are big shifts,” said Craig Johnson, president of Customer Growth
Partners, a research and consulting firm. “It is like turning around the Queen
Mary. You can turn the rudder, but it takes time to gain a purchase.”_

To my mind, most physical stores ought to be like showrooms: innumerable
products are hard to judge solely from pictures and text descriptions but easy
to judge with ten seconds in person. Let online and off converge.

~~~
qualitative
Okay, but there's the old Amazon's showroom problem.

People go to the store, look at the thing, then, maybe buy it online anyway,
for any number of reasons. Net effect, physical locations become showrooms
that move very little actual product, and fail to close the expected number of
sales.

~~~
gk1
I think that's exactly what parent is suggesting: The physical store should be
for letting people try and touch items, before they buy them from your
website. Warby Parker, Bonobos, and (in some states) Tesla already do this.

~~~
scarface74
That’s fine if you are selling your own product in the store and online. Apple
doesn’t care if you use thier store as a showroom and buy an iPhone from the
carrier.

That doesn’t work if you are Best Buy.

~~~
nordsieck
>> The physical store should be for letting people try and touch items, before
they buy them from your website.

> That doesn’t work if you are Best Buy.

Apparently it does work if you're Best Buy.

> we price match products shipped from and sold by these major online
> retailers: Amazon.com ...

[https://www.bestbuy.com/site/help-topics/best-buy-price-
matc...](https://www.bestbuy.com/site/help-topics/best-buy-price-match-
guarantee/pcmcat297300050000.c?id=pcmcat297300050000)

~~~
travmatt
If I’m understanding your comment correctly, you believe the fact that Best
Buy has been forced to price match as a way to stop losing business is
evidence that they’re not losing business?

~~~
zeta0134
Nah, it's that Best Buy doesn't make most of its money on the items they price
match. Their big sellers are their mobile department and all the _accessories_
folks like to pick up with their new purchase, which are very often store
exclusives and have incredibly high margins. They make a killing on chargers,
adapters, phone cases, you name it, but actually make tiny margins on a lot of
their "core" items. The big ticket item they price match is often kicked back
by the vendor anyway, so the store doesn't lose out when they do it. Their
goal is just to get folks in the door, and let the momentum of a good sales
interaction close the deal. (Questionable on the "good," they're admittedly
not very good at screening / training, but in aggregate this strategy works
well for them.)

Best Buy price matches because it gets people in the store. I don't believe
for a second that they did it in response to losing business to online
storefronts; rather, I think it's far more likely that they did it in response
to other retail chains doing the same. Their customers came to expect it, so
they obliged, as a marketing tactic to make sure their retail competition
didn't have that as an edge. Their price match policy is also pretty strict;
they won't match just _anything_ on Amazon, it has to have some degree of
verification and be from a trusted seller. (Especially for things like iPads /
common fake listings, etc.) Last time I checked it had to be "Sold and shipped
by Amazon" but that might have changed, it's been a while.

(Source: I worked at a Best Buy store for about 4 years.)

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rossdavidh
So, one thing I didn't know for a long time was that grocery stores charge the
producers of packaged goods for shelf space. Grocery stores buy the produce,
around the periphery, but in many cases just rent the shelf space to the
manufacturers of the finished products. Presumably this is not always the
case, I'm not expert in that sector. But I wonder if the solution to the
"Amazon's showroom" problem is to imitate the grocery store model.

I note that Amazon felt compelled to buy a grocery store chain, in order to
get a purchase in that sector.

~~~
jsiepkes
I wonder how much that really matters. In the end a brand has a certain amount
of money it can "give" the grocery; They can give this money by buying shelf
space, lowering purchase prices, giving marketing money, etc. But it the end
the size of the bag of money is still the same.

~~~
rossdavidh
True, but the division of that bag of money between the showroom and the
shipping department could be different.

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purplezooey
More in their pockets from the tax cuts, eh. Yeah. ok.

