Page 1 of 1

Future of brick and mortar stores

Posted: 2018-11-05 12:10am
by mr friendly guy
I just saw a Chinese documentary about robotics and they showcased a store in Hangzhou. Basically this store serves predominantly to allow consumers to see the products in the flesh rather than online. The customers can then buy this online (and due to the way Chinese smart phone ecosystem works, its quite easy to do so, you just scan in a code and it makes it easier to find it online). There is supposedly minimal human staff at that store. They describe employing 10 instead of 15 for a store of this size, ie two thirds the amount. Its also mention they can get the number down to 7 ie less than half, once customers become familiar with the automatic payment system.

They can also buy it there if they must have it, although its not clear whether there is a price differential. Certainly from my experience, I did go a shaver store when I needed a new shaver, saw what I wanted, then found the online store for that same company and waited for the delivery. I saved like close to $100, and for added bonus the warehouse was located in my state rather than the Eastern states so delivery was quick.

So what do you guys think the future of bricks and mortar stores would be in the age of increasing powerful AI and robots? Will we have stores lke the one above, where people come in just to see the products and then order it online?

Re: Future of brick and mortar stores

Posted: 2018-11-05 03:07am
by U.P. Cinnabar
The stores, yes, the staff, not so much, when you can use your smartphone to shop and pay, then drive there to pick it up.

Re: Future of brick and mortar stores

Posted: 2018-11-05 04:31am
by Broomstick
The notion that on-line shopping will completely replace brick-and-mortar stores ignores the fact that for many people shopping isn't just about acquiring goods. There are people who shop in groups (usually woman) and thus shopping serves a social function as well as a practical one. My store recently took out four self-service lanes and replaced them with staffed lanes because the self-serve wasn't as popular/utilized as anticipated. We also had a lot of theft through the self-serve lanes. I expect those automated stores do, too - thieves seem good at figuring out how the systems work and how to get around them. There are also cultural factors - numerous customers of ours have refused to use the self-serve lanes because they prefer to interact with a human rather than a machine, and such people are less inclined to shop on-line, as well as those wanting to preserve jobs for humans.

On the flip side of the jobs issue - my store is seeing more and more "professional shoppers" - people hired through an app to do someone's shopping for them.

I think, going forward, we'll still see brick-and-mortar stores, just fewer of them. People still want to get out of the house (well, most folks do, there are a few who genuinely prefer not to).

Re: Future of brick and mortar stores

Posted: 2018-11-05 01:36pm
by Elheru Aran
Broomstick wrote:
2018-11-05 04:31am
The notion that on-line shopping will completely replace brick-and-mortar stores ignores the fact that for many people shopping isn't just about acquiring goods. There are people who shop in groups (usually woman) and thus shopping serves a social function as well as a practical one. My store recently took out four self-service lanes and replaced them with staffed lanes because the self-serve wasn't as popular/utilized as anticipated. We also had a lot of theft through the self-serve lanes. I expect those automated stores do, too - thieves seem good at figuring out how the systems work and how to get around them. There are also cultural factors - numerous customers of ours have refused to use the self-serve lanes because they prefer to interact with a human rather than a machine, and such people are less inclined to shop on-line, as well as those wanting to preserve jobs for humans.

On the flip side of the jobs issue - my store is seeing more and more "professional shoppers" - people hired through an app to do someone's shopping for them.

I think, going forward, we'll still see brick-and-mortar stores, just fewer of them. People still want to get out of the house (well, most folks do, there are a few who genuinely prefer not to).
Along these lines, don't forget that there are certain markets where the shopping can be a fundamentally social act rather than economic. Game stores are the main one that I can think of, at least as long as tabletop games, card games, and the like are still a thing. Of course, it'll start transitioning to a model where most players don't buy the actual games at the store, because hell no the cost, though certainly they might buy some things there for the convenience of it. But it will still act as a place for them to meet and play, possibly funded in part by a small membership fee like 'makerspaces'.

Re: Future of brick and mortar stores

Posted: 2018-11-06 06:51am
by Gandalf
Elheru Aran wrote:
2018-11-05 01:36pm
Along these lines, don't forget that there are certain markets where the shopping can be a fundamentally social act rather than economic. Game stores are the main one that I can think of, at least as long as tabletop games, card games, and the like are still a thing. Of course, it'll start transitioning to a model where most players don't buy the actual games at the store, because hell no the cost, though certainly they might buy some things there for the convenience of it. But it will still act as a place for them to meet and play, possibly funded in part by a small membership fee like 'makerspaces'.
Indeed. My local game store doesn't actually sell a lot of gaming stuff, but the area is cheap, they've a fuckton of tables for tournament hosting, and sell lots of snacks because gamers. A friend who used to run a game store said that MTG tournaments alone kept the store afloat. They can't compete with online, so just don't fight it a whole lot. They keep some stuff on the shelves, aimed at impulse/gift buys, but that's about it.

But stores like that are becoming the exception, because the customer pays a premium for adding a social experience to the shopping. As the price difference between local shop and online shop increases, social shopping will become a less viable activity. Unless of course one is just one of those arsehole teenagers who hang around retail spaces and never buy anything.

Re: Future of brick and mortar stores

Posted: 2018-11-06 03:28pm
by Elheru Aran
Gandalf wrote:
2018-11-06 06:51am
But stores like that are becoming the exception, because the customer pays a premium for adding a social experience to the shopping. As the price difference between local shop and online shop increases, social shopping will become a less viable activity. Unless of course one is just one of those arsehole teenagers who hang around retail spaces and never buy anything.
Yeah, hence why I think it might transition to some form of shared space rather than a retail space. The primary downside of this is that it will make entering the hobby somewhat less accessible to the casuals-- they can't just walk in with a hobbyist friend, watch a game, get their interest kindled, walk over to the shelf and buy a beginner set of whatever and get started playing. Though I suppose there's no real reason the 'shared space' couldn't have some shelves with said beginner sets.

The main problem in this particular hobby is that the retail store cost is just too darn high, and the convenience of buying online is benefited by deals such as free shipping via Amazon Prime and such. I'm not sure if brick-and-mortars even make a profit on say Games Workshop products, given that you can buy stuff for the exact same price direct from GW. I mean, they have to be making -something- off it, but... yeah. So the vast majority of players (I'm speaking for GW here, I don't have any experience in other directions) are getting their models online, either from GW, third party retailers, Amazon, or Ebay. Anything to save a few bucks.

My own local game store hedges its bets by going two directions-- gaming, and anime/manga/J-pop. They used to do comic books too but that apparently didn't get much play so they discontinued that (probably didn't help that we also have a big-box bookstore in town and a independent comic store as well). But they employ all of like three people, two of whom I'm pretty sure are the owners, so 'employ' might be the wrong word there.

Anyway, to return to the topic at hand: there's always going to be a place for brick-and-mortar. The most notable will be the big-boxes like Walmart. Then there'll be stuff that has a social context; clothes stores, men's wear stores, and so forth. One might want to go with a group to those stores, or go for a custom fitting, things like that. Finally, specialized stuff. Trade stores in particular-- tradies don't have the time to sit around and wait for stuff to come in, they need to go get it and get the job done. Hobby stores to a lesser degree, niche hobbies in particular are going to suffer. I would not be too surprised to see the big-box hobby and crafting stores expanding somewhat to have more community participation.

Re: Future of brick and mortar stores

Posted: 2018-11-08 02:17pm
by Civil War Man
Elheru Aran wrote:
2018-11-06 03:28pm
Then there'll be stuff that has a social context; clothes stores, men's wear stores, and so forth. One might want to go with a group to those stores, or go for a custom fitting, things like that.
Besides that, there is also a practical reason for the survival of brick and mortar clothing stores. Someone may not want a custom fitting, but being able to try on clothes is really convenient if they are unsure of their size or if their size recently changed. You can't do that ordering online. Imagine trying to by pants after losing or gaining a lot of weight, or buying bras for your teenage daughter going through puberty, without being able to test the fit before buying. It'd be a nightmare.

A lot of casual clothing also uses nebulous sizes like Small, Medium, Large instead of precise measurements, and those definitely change over time with fashion trends. A Medium t-shirt made in a year when tight clothing is "in" could actually be smaller than a Small that was made in a year where very loose clothing is considered fashionable.

Also, one particular type of brick and mortar that's been able to survive, even though it was nearly driven to extinction at one point, is the book store. Big book stores like Barnes and Noble or Borders almost killed them, but then Amazon became the proverbial asteroid that wiped out those dinosaurs. A lot of small bookstores have survived by doing what you mentioned in your post, being part of a social shopping experience or specializing in specific types or genres of book.

Re: Future of brick and mortar stores

Posted: 2018-11-08 03:35pm
by U.P. Cinnabar
Or, in used, hard to find books only available on line through Project Gutenberg. For example, The Angel Of the Revolution or one, I finally tracked down after thirty years of searching, It Can't Happen Here.

Re: Future of brick and mortar stores

Posted: 2018-11-08 05:39pm
by Elheru Aran
Civil War Man wrote:
2018-11-08 02:17pm
Also, one particular type of brick and mortar that's been able to survive, even though it was nearly driven to extinction at one point, is the book store. Big book stores like Barnes and Noble or Borders almost killed them, but then Amazon became the proverbial asteroid that wiped out those dinosaurs. A lot of small bookstores have survived by doing what you mentioned in your post, being part of a social shopping experience or specializing in specific types or genres of book.
Eh, that will be kinda regional. I live in a semi-OK to fairly well off suburban area (the demographics tend to change as you get further out of the city) south of Atlanta, and I can count the small bookstores on the fingers of one hand. But we've got a Barnes and Noble and a Books-a-Million, both of which seem to do reasonably well. I think it's mostly a market thing. There are plenty of mom-and-pops in the city.

Re: Future of brick and mortar stores

Posted: 2018-11-08 07:52pm
by U.P. Cinnabar
Mainly in L5P,

Re: Future of brick and mortar stores

Posted: 2018-11-11 08:45am
by The Jester
Elheru Aran wrote:
2018-11-05 01:36pm
Along these lines, don't forget that there are certain markets where the shopping can be a fundamentally social act rather than economic. Game stores are the main one that I can think of, at least as long as tabletop games, card games, and the like are still a thing. Of course, it'll start transitioning to a model where most players don't buy the actual games at the store, because hell no the cost, though certainly they might buy some things there for the convenience of it. But it will still act as a place for them to meet and play, possibly funded in part by a small membership fee like 'makerspaces'.
Unfortunately, even local gaming stores are dying out. Their biggest revenue generator, MtG, grows ever thinner on the margins as they're assailed on both sides by WotC effectively raising prices and customers shopping around more aggressively for the lowest possible price. In the meantime, they also have to contend with ever increasing rental overheads and the especially brutal nature of commercial tenancy contracts. I suspect, even as rental spaces, their days are numbered.

Re: Future of brick and mortar stores

Posted: 2018-11-11 10:05am
by Vendetta
U.P. Cinnabar wrote:
2018-11-05 03:07am
The stores, yes, the staff, not so much, when you can use your smartphone to shop and pay, then drive there to pick it up.
For most objects larger than a single carrier bag, the future is likely the opposite way round.

Go into the store to look at the thing, then order it on your phone for delivery to your home.

The trick for retail outlets is to make sure that the customer is ordering from your website after fondling the product in store. Good integration between physical and online retail and good aftermarket service are going to be key parts of that.

Re: Future of brick and mortar stores

Posted: 2018-11-11 11:34pm
by Elheru Aran
The Jester wrote:
2018-11-11 08:45am
Elheru Aran wrote:
2018-11-05 01:36pm
Along these lines, don't forget that there are certain markets where the shopping can be a fundamentally social act rather than economic. Game stores are the main one that I can think of, at least as long as tabletop games, card games, and the like are still a thing. Of course, it'll start transitioning to a model where most players don't buy the actual games at the store, because hell no the cost, though certainly they might buy some things there for the convenience of it. But it will still act as a place for them to meet and play, possibly funded in part by a small membership fee like 'makerspaces'.
Unfortunately, even local gaming stores are dying out. Their biggest revenue generator, MtG, grows ever thinner on the margins as they're assailed on both sides by WotC effectively raising prices and customers shopping around more aggressively for the lowest possible price. In the meantime, they also have to contend with ever increasing rental overheads and the especially brutal nature of commercial tenancy contracts. I suspect, even as rental spaces, their days are numbered.
On the other hand...

Realtors are going to have to deal with the very realistic concern that if they raise prices much more beyond what their local market can sustain, they are going to have a lot of empty storefronts. This is already a big problem in many municipalities in the US, someone will build a strip-mall or whatever, it'll fill up quickly the first few months... and then the small businesses go out of business because the area can't support the extra businesses, and the storefronts sit empty for who knows how long. This is probably less of a concern in other countries with smaller populations and fewer big-box stores dominating the local economies, but it's a problem in the US.

Re: Future of brick and mortar stores

Posted: 2018-11-12 11:57am
by The Jester
Oh, I know that's very much something that's growing in the US. One curiosity is that a REIT would rather have a location unoccupied than reduce rent. How that plays out over the long-term, it's hard to say. Perhaps most strip malls just become unattractive for real estate investment as money flows into other options that offer better returns. Perhaps tax incentives change as the industry finds a new ways to prop up their investments.

That said, I'm still rather bearish on hobby stores (or spaces) in general. Hobbyists tend to be very aggressive in how hard they squeeze retail, even if the aggregate behaviour negatively impacts the hobby itself.

Re: Future of brick and mortar stores

Posted: 2018-11-13 03:06am
by Jub
I think you almost have to make a fast food and hobby place if you want to run an LGS these days. There are gamer pubs popping up at a decent rate around me and they seem to do okay. Focus more on selling food and gaming space than traditional LGS products. Maybe even rent tables for blocks of time and give a discount or even make the rental free with a food order above a certain bar, or have a membership that shaves a bit off of rental fees and food prices.

Re: Future of brick and mortar stores

Posted: 2018-11-13 04:21pm
by Elheru Aran
Jub wrote:
2018-11-13 03:06am
I think you almost have to make a fast food and hobby place if you want to run an LGS these days. There are gamer pubs popping up at a decent rate around me and they seem to do okay. Focus more on selling food and gaming space than traditional LGS products. Maybe even rent tables for blocks of time and give a discount or even make the rental free with a food order above a certain bar, or have a membership that shaves a bit off of rental fees and food prices.
I honestly can't say I've ever heard of such a venue here in the US. They might exist in a few places, granted, and the US is a big place. That does contribute to the problem though-- the gamer population tends to be a bit thin on the ground, congregating mainly in urban areas and towns with a larger population of young people than usual (think college towns). My LGS does hawk a few food items on the side, like coffee, pop-tarts, chips, sodas, and a selection of Japanese treats (see the whole comment earlier about them catering to the anime/J-pop/etc crowd).

A more likely trend, I think, would be restaurants that had gaming as a secondary venue. That way you could run it as mostly a restaurant, and have a few tables around the room for gaming, rather than trying to double up on business and food-establishment licenses. You wouldn't be selling much in the way of gaming stuff there other than perhaps secondhand stuff and the occasional starter set, but people could come and buy food and drink while they game. It could even reframe itself a little more along more... what's the word. Socially acceptable? lines, to draw in non-gamers a little more readily, by having tables for plain ol' board games as well, and kids' games. Sort of like how Starbucks used to have board games available for people to play.

Re: Future of brick and mortar stores

Posted: 2018-11-13 05:40pm
by Bedlam
Certainly it seems to be a thing here in Edinburgh, we've had 3-4 'Games Cafe's' open over the last few years. The normally have space, tables and a variable collection of board games. They normally serve a range of food as well, there's an entrance cost which is normally reduced if you buy an annual membership. There's a few full 'games stores' as well but the Cafes usually sell a limited selection of things as well.

Re: Future of brick and mortar stores

Posted: 2018-11-13 09:11pm
by Jub
I think the game pub/cafe/burgers idea works better in places with denser populations than the US has. Too many small communities won't have a store while the places on cities may end up crowded and expensive. With closer proximity and higher density you get around that somewhat.

Re: Future of brick and mortar stores

Posted: 2018-11-15 04:50pm
by Elheru Aran
Jub wrote:
2018-11-13 09:11pm
I think the game pub/cafe/burgers idea works better in places with denser populations than the US has. Too many small communities won't have a store while the places on cities may end up crowded and expensive. With closer proximity and higher density you get around that somewhat.
Along these lines, the US is definitely in something of an unique position when it comes to retail (as far as a broad global overview of how the economy works), I think.

You have both a big country and a big population... but the country is big enough that you still get fairly low population densities in many parts. Even the really big urban areas manage to achieve fairly moderate densities thanks to suburbs-- the population is spread out around the cities rather than compressed into them. And these aren't really part of the cities themselves, they tend to be independent communities that just happen to butt right up against the city limits, with agendas of their own. Outside the urban areas, towns can be far more loosely knit-- for example, my parents' mailing address is in one town about 20 minutes away from them, even though they're in a different county, and they get their groceries in another town that they're actually a tad closer to... but they live several miles from anything that could be called even a 'village' in any direction. Oh, they have neighbors, but that does not a municipality make. In larger/more rural states, individual families can be as much as hours away from neighbors, never mind the nearest community.

My understanding of, for example, Europe on the other hand though suggests to me that the majority of people live in relatively close quarters. Even rural villages will tend to have most of their dwellings in the same general, say, one-mile-square block. There may be a number of scattered family dwellings in the country, but nobody is more than a hour's (plus or minus) drive or so from the nearest village.

As such, the small-scale American economy has gravitated heavily in recent years towards the big-box, all-in-one store where you can buy everything (almost) that you need in one trip. This is particularly convenient for rural citizens who may only be able to go to the store infrequently, and as such have to do the majority of their shopping all at once. So, Walmart is particularly popular for this exact reason, as are slightly more specialized but still big-box-ish stores like Home Depot/Lowe's for home improvement, hardware, lumber, building supplies etc., Tractor Supply and other agricultural supply stores which also happen to carry a wide variety of hardware and even clothing, farrier supply, etc... generally clustered in a convenient shopping center in the middle of any municipality large enough to support these stores. As towns expand, they may attract more prestigious stores in similar roles but a somewhat higher social profile such as Target and Publix, and more chain stores with specialized offerings like Men's Wearhouse, Gamestop, JC Penney and whatnot.

At the same time, the low population density means that small businesses (NOT franchises or part of national chains) have to struggle to attract business. National chains will already be known among the population-- why go to your aunt's craft store down the road, when you can drive a little further and go to Hobby Lobby because der, Christian business, plus they have awesome sales? So anybody who starts a small business is going to have serious competition from already established, financially powerful corporations. The Men's Wearhouse down the street might not seem impressive, but it's backed by some serious money, while your attempt to start a house of tailored menswear... isn't. Even more niche businesses like game stores have it worse-- not only does low population density impact them, they have high overheads but low income.

Europe and most other parts of the world that are well enough off to support a First World retail store model, on the other hand: communities are closer together and more accessible. While certainly you have rural communities, they will have their own long established businesses serving the community, with family connections and local history. The only way for megacorps to really penetrate these markets is by undercutting the small businesses on price, which does work, but it takes time, and many countries actively try to support local businesses more than we do here in the US. Not sure how that works in Asia though.

This goes way back in the US as well; the Sears catalog was a major all-in-one, as were stores like Woolworth's. As the megacorps multiplied, support for local businesses fell off in favor of big-box stores backed by corporate money which offered more variety and breadth of product than any local business could ever compete with unless highly specialized. This is why Walmart isn't going to go anywhere.