Middle-market stores, like Macy’s, are struggling to compete with large, low-priced retailers like Walmart and Amazon. And where we shop can have an enormous impact on jobs, communities, and how we spend our time. Darrell Rigby, a partner at Bain & Company, and journalist Charles Fishman, explore the battle of the retail giants, and the future of shopping.
Three Takeaways
- Not all retail is suffering. Many luxury retailers are doing well, and so are low-end stores, like T. J. Maxx. But the biggest of those low-price retailers? Walmart. Fishman says the company “cut the legs out” from mid-level and small-town stores through pricing, convenience, and selection. And we voted with our wallets – other stores just couldn’t compete with Walmart’s lower prices.
- Now, Amazon sets the rules of the retail landscape. They’re “kicking retail Darwinism into fast forward,” Rigby says, and they’re causing the weak to die faster and forcing the strong to improve. Competitors, including Walmart, are scared. But it isn't Amazon's variety these companies should worry about, Rigby Say. It's their innovations, like Amazon Prime, which improve the shopping experience.
- Rigby thinks that, as retail changes, products may become less important. “What customers care about these days are the experiences.” Experiences, he notes, leave us happier in the long run, because a product can lose value over time, but memories of our experiences get better with age.
More reading
- The New York Times examines Macy's real estate value, which might keep their retail business afloat.
- Walmart has one thing Amazon doesn’t: a large network of brick-and-mortar stores. Business Insider looks at how physical locations are helping the retail giant compete.
- Fast Company explores the scientific evidence suggesting that spending money on experiences makes you happier than purchasing material goods.
