Tuesday, July 19, 2011

Another Brick & Mortar To Bite The Dust

Big box stores are having tough times. We have seen the close of many retail chains including Circuit City, Linens'n Things, Office Depot, and now Borders Book Stores. "Borders’ defeat marks the beginning of a new era, where online book sales and digital downloads for e-readers dominate the market." But is technological change the only reason for their demise? While these "stores" have closed, their competitors continue to do business. Best Buy, Bed Bath & Beyond, Staples, and Barnes & Noble are still here.

All businesses must adapt to changing conditions, both internal and external forces. Technological change did not only affect big box stores. AOL has suffered because they too couldn't adapt to changing conditions. Borders could have survived if they had recognized early enough that their business was changing. Barnes & Noble took that chance, by building an e-reader, the Nook,and learning to compete in the online space. There next challenge is how to better integrate online and big box into a successful business strategy. Different merchandising, in-store deals with Nook owners, etc.

The future of big box, brick and mortar stores should not be at risk, but they need to integrate online and offline shopping with better marketing. And perhaps too, a level playing field might be helpful, where goods are subject to tax, even when purchased online. That seems a battle that Amazon and others will eventually lose. Consumers like to shop both at stores and on their computers, they like value, and they like service. Successful retailers will figure out how to adapt and integrate for a better online and offline shopping experience.