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For Four Retailers, Do or Die
The Wall Street Journal ^ | December 27, 2012 | ANN ZIMMERMAN And DANA MATTIOLI

Posted on 12/27/2012 8:46:58 AM PST by MinorityRepublican

While 2013 will be a tough year for retailers due to the tepid economic recovery, a few in particular face a critical 12 months. Their experiences highlight the challenges facing store chains, from increasingly cautious consumers to fierce online competition.

These unlucky retailers are going into the New Year with extra woes: slipping sales, questionable strategies and tight finances—which is why they are the ones to watch, and not in a good way.

Best Buy Co. BBY -1.22% has been plagued by the retail phenomenon called "showrooming," where shoppers examine products in its stores but buy online through rivals. A quarter of shoppers who said they had showroomed had done so at Best Buy, according to a recent Harris Poll, so analysts will be watching to see if it can capture more of those sales on its own website.

J.C. Penney Co. JCP -4.48% has been trying to ditch its image as an old-fashioned department store where Middle America went seeking bargains. But its rapid and radical makeover has left it burning through cash and struggling to attract shoppers, leading to questions about how long the company can afford to stick to its new strategy.

RadioShack Corp.'s RSH -5.29% bet on mobile phones and tablets has backfired. It has sold more of these low-margin devices but is making less money than it did retailing old standards like cameras and computers. Though it staved off a cash crunch earlier this year by suspending its dividend, mounting losses cloud its future.

(Excerpt) Read more at online.wsj.com ...


TOPICS: News/Current Events
KEYWORDS: bestbuy; jcpenney; radioshack; sears; storechains; storechainsales; storechainsstruggle
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To: hoosierham

LOL! I used to call Radio Shack “Computer Shack” as they hadn’t had anything to do with “Radios” in decades. Overpriced, re-branded merchandise and sales help that don’t know diddly.


41 posted on 12/27/2012 9:31:01 AM PST by Minutemen ("It's a Religion of Peace")
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To: al baby

Exactly. I bought Mrs. R2 a laptop for Christmas. I shopped the same thing at Amazon and Best Buy. Same price.

So naturally I bought it at BB. I buy stuff on Amazon all the time, never had a problem, but I’d be leery of paying a thousand bucks for some TV to be sent. I’d rather put my hands on it at the store then buy it and take it home same day.


42 posted on 12/27/2012 9:32:52 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: T-Bird45

You’ve held a grudge since 1981?

Really?

I like you. That takes perserverance and stick-to-it-iveness.

(lolol)


43 posted on 12/27/2012 9:35:55 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: MinorityRepublican

Reading the comments over at WSJ on the story, the consensus seems to be that these four retailers aren’t long for this world. Best Buy gets a good deal of ire. With regard to JCP’s, the commenters generally figure that JCP is outdated, they can’t compete with Macy’, and even though their new store layouts and whatnot are all well and good, the stores are understaffed and it’s a case of “a day late and a dollar short”. Sears is pretty much in liquidation mode, the only thing they have going for them is the Kenmore and Craftsman brands....customer service is awful, when it can be found at least. Radio Shack is useful for finding obscure items, but it’s too much of a niche market to be truly competitive.

Those are so big names in American retail. But most likely, I figure Sears and JCP will go the way of the Montgomery Wards by sometime later next year. Maybe earlier. Radio Shack, maybe. I honestly don’t know enough about Best Buy, as I’ve never shopped there once, so I can’t say.

It’s ironic. Sears and JCP were the Amazon.com of their era. They built their retail empires with their catalogs, and made millions through the US Mail. Someone at both of those retailers sure as hell fell asleep sometime during the 1990s, and now the forces of free enterprises are going to drink their milkshake.


44 posted on 12/27/2012 9:39:40 AM PST by AnAmericanAbroad (It's all bread and circuses for the future prey of the Morlocks.)
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To: Responsibility2nd

I’m Irish and we’ve been holding a grudge against the Brits for 800 years (a non-Muslim World Record, I think...)


45 posted on 12/27/2012 9:40:24 AM PST by Buckeye McFrog
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To: Buckeye McFrog

I remember SM! Also BEST Products. One or the other had a big framed photo of a kindly old couple (the founders) by the checkout - apparently you were supposed to believe it was still a mom & pop store.

By now I hope that people are smart enough to provide false names, information, etc. to retailers.

When ‘customer loyalty’ schemes began in earnest (those barcode cards which retailers view as marketing gold), many users posted/shared their barcodes (which linked to bogus addresses) and encouraged others to copy same. Of course the retailers, who thought they had struck gold in terms of customer data but were simply too cheap and lazy to pay for proper research, reacted with horror and posted all sorts of dire warnings about sharing the barcodes, saying that one’s personal data could be compromised. But if the codes corresponded to bogus data where was the risk? And if the retailers were holding up their end of the privacy bargain where was the risk (again)?

Apparently service, follow-up and loyalty earned rather than demanded are 20th century concepts. When these retail Titanics go down will anyone hold the marketing wizards to account?


46 posted on 12/27/2012 9:40:30 AM PST by relictele
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To: rarestia
They used to warranty everything for life

Hand tools but you go on to complain about power tools.

47 posted on 12/27/2012 9:40:41 AM PST by newzjunkey (bah)
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To: relictele

The photo of the old couple would have been Harry and Mary Zimmerman, who founded Service Merchandise. By all accounts a warm, generous Jewish couple from Nashville.

Unfortunately when they retired their son Raymond took over the business and essentially ran it into the ground. Had the misfortune to meet him once. A real piece of work!


48 posted on 12/27/2012 9:43:32 AM PST by Buckeye McFrog
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To: MinorityRepublican
First of all, if you are going to pay for online news (after Free Republic), the WSJ site is the way to go. Their articles are in-depth and intelligently written by both intelligent and educated people. As a bonus, their Op-Ed section does not tilt to the far-left.

Best Buy provides an absolutely awful shopping experience each and every time I go there (which is fortunately increasingly less often). Virtually nobody who works at the store has any real knowledge of the products they carry there and if they did, they'd move on to a better job. Think about it. If you must shop there however, stay away from the "extended warranties" (which are a scam) and all accessories like cables, chargers and connectors which are horrendously overpriced. If you need any of the latter, go over to monoprice.com and you will get virtually any cable, charger or connector you want at only a fraction of the price. They are priced so cheap at that site that I usually order two of whatever I am buying so I have an extra.

Radio Shack...it is a mystery to me how they are able to stay in business. Whenever I walk into one, I am usually the only customer in the entire store. They stopped making you give your name and address for buying a battery a long time ago but virtually everything in their little stores can be bought on Amazon.com for less money. Their only redeeming factor is they still sell things that you thought were obsolete 20 years ago. So if you need something like an audio cassette recorder or a cheap transistor radio for the beach, that is the place to go for that.

Brick and mortar retail as a whole is a dying industry. In a few years, Amazon.com (and other companies like it) will put vehicles on the road 24/7 that will deliver an order to you in hours or even minutes. So if you are out of toothpaste, there will be a van in your neighborhood that will drop it on your doorstep 15 minutes later. Sounds far-fetched but business plans are being developed right now to do just that. These vans will have access to various "drops" in their area where merchandise of all types will be stored and replenished based on demand in a given area.

Google is working on vehicles that drive themselves. Not so much for people but for these sort of deliveries.

49 posted on 12/27/2012 9:43:48 AM PST by SamAdams76
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To: Fido969

I just bought some fine flannel shirts with pearl buttons at Sears for 18 bucks. An Everlast hoodie sweatshirt for 20. Anywhere else this stuff is 40 to 80 . Their jeans..levi and wrangler. Are cheaper then the Levi stores. Ill be bummed if sears closes.


50 posted on 12/27/2012 9:47:16 AM PST by Blackirish (Forward Comrades!!!!!!!!!)
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To: ClearCase_guy

It’s all about the training, and training is under the thumb of ivory tower management. Cue the groupthink and PowerPoints and do-this-or-else-cos-we-will-be-watching. The training obviously consists of ‘mention a part or a feature and come up with some relevant gloom and doom scenario.’ And so we get some rather ludicrous scenes where they attempt to sell coverage on $10 flash drives that are SUPPOSED to be more or less disposable. I saw one person buying a remote and the BB cashier tried to sell the coverage ‘if a button stops working.’

I simply tell them that I’m buying the item for someone else. Since that person isn’t there to hear the pitch, no pitch is needed. The strain and frequent panic on the cashier’s face when confronted with this dead end is priceless.

Meanwhile, BB will lie to itself and blame Amazon.


51 posted on 12/27/2012 9:48:44 AM PST by relictele
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To: relictele
By now I hope that people are smart enough to provide false names, information, etc. to retailers

Got chewed out by my then-boss when my Radio Shack circulars started showing up at the office addressed to Mr. Al Kaholik.


52 posted on 12/27/2012 9:48:44 AM PST by Buckeye McFrog
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To: ClearCase_guy
I said, "If you try to sell me one more damn thing, I will turn and walk out and you will lose a $1000 sale. Just take my money and let me go." He said he understood completely. He apologized profusely. Then he tried to sell me the extended warranty.

The last big ticket item I bought at Best Buy was a laptop that had been deeply discounted, back in early 2003.

They pushed the extended warranty way too hard, and were using deliberate delaying tactics to get me to buckle. It finally got to the point where I figured out that they were probably taking a loss on the thing without the warranty and were prepared to tick me off to the point of walking away from the purchase. I decided to hang in there, even after they started playing games with triggering a "decline" on my credit card. I loudly demanded to use their phone and called the CC company right there, verified that I hadn't come anywhere near maxing out the thing and LOUDLY conveyed that information to them.

It was at that point that they backed down and my card suddenly "worked" ... probably because they exhausted the options in their playbook/scripts (and places like that have such and demand their employees use them), I was eating up staff time and because other customers were noticing what was happening to me.

The thing to keep in mind with stores like that, as I said above, is that they have well-defined playbooks/scripts intended to push through successful upsells. To an extent I feel bad for the poor schmucks manning the registers who have to use the scripts, often at the risk of their jobs. Which was probably the situation in your case - the sales clerk HAD to push for the warranty under a well-established and proven philosophy that if you walk away from the purchase someone will come in the door shortly after you walk out that WILL go for the upsells.
53 posted on 12/27/2012 9:49:46 AM PST by tanknetter
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To: Buckeye McFrog

Humorous point taken but if it was a pseudonym how did he know it was you?


54 posted on 12/27/2012 9:51:32 AM PST by relictele
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To: Responsibility2nd

like


55 posted on 12/27/2012 9:53:32 AM PST by al baby (Hi Mom)
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To: relictele

In my lifetime I have only ever had one job where I was not the #1 leading suspect on all practical jokes.

And it was a true relief being off the top of the list for awhile. Thank you, Dave. Wherever you are.


56 posted on 12/27/2012 9:54:04 AM PST by Buckeye McFrog
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To: relictele

He must be the only one in the office with a red nose.


57 posted on 12/27/2012 9:54:28 AM PST by SamAdams76
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To: Gaffer

Do you eat with that mouth?


58 posted on 12/27/2012 9:55:25 AM PST by Mom MD (Liberals are slinkies. Good for nothing but they make you smile when you push them down stairs.)
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To: relictele
Humorous point taken but if it was a pseudonym how did he know it was you?

A boss knows that if a prank is pulled, it is most likely going to be done by the guy named Buckeye McFrog.

59 posted on 12/27/2012 9:57:28 AM PST by Right Wing Assault (Dick Obama is more inexperienced now than he was before he was elected.)
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To: Fido969

Sears has been on the ropes a number of times, and even the their recent alliance with K-Mart was a desperation move, that only delayed for a while what is the inevitable end and liquidation of an American institution.

Before there was a K-Mart, before there was a Wal-Mart, there was Sears, all things to all people. Mail-order was the means by which they built name recognition and popular appeal, and only later did the brick-and-mortar stores come along. Their catalogues were the source of a great deal of sex education for the young males of America, and even contributed to early-day recycling, substituting for tissue in the country outhouses that dotted the country side and eve most small villages in the early part of the 20th Century. One of the big nostalgia items in recent years were the reprints of early Sears, Roebuck & Company catalogues, and comparing some of the prices with what a similar item today. You could even order the complete bill of materials, all pre-cut and identified, to build a house on your foundation, the old “Sears Craftsman” designs, and for a while, in the early 1950’s, a car cloned from the Kaiser Henry J model, called the Allstate.

Wal-Mart is the 900-pound gorilla in the room today, WAY bigger than any grocery chain, or any hardware line, or any soft-goods store in the US, and even in the wider world market. Target is a far-distant second place.

At one time, Sears’ major competitor was Montgomery Wards, does anyone still remember that name? They competed on much the same turf, but they declined and went away a long time ago.


60 posted on 12/27/2012 9:59:18 AM PST by alloysteel (Bronco Bama - the cowboy who whooped up and widened the stampede.)
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