This Weekend’s I-10 Shutdown; The Future of Retail


Photo: elnina via Swamplot Flickr Pool


6 Comment

  • Swamplot getting a shout out in the J Black’s article, good work team!

  • There continues to be a need for stores where consumers can try things on and get a sense for the fit and quality of particular items. One doesn’t (or shouldn’t) just purchase perfume or cologne smell-unsmelt, for example.
    Yes, traditional retailing is challenged, but the category isn’t dead. Rather, retailers are becoming more tightly focused on their core customer base and on the opportunity to convert brick-and-mortar customers to regular online purchasers.
    To that end, it should be said that the Macy’s stores that were closing are in Houston’s third-tier malls, and that they were flagged as such not through organic expansion but rather as a consequence of the American/Federated merger some ten or twelve years ago. One could argue that having those stores there actually hurt the Macy’s brand by making it seem less exclusive than it previously had been; market share and scale is certainly important, but it isn’t everything.

  • @TheNiche, I think another important point is what feels like the hollowing out of middle class retail Mixed use centers may be the new hot thing, but they’re only for the upper incomes. It’s surprising walking through the galleria at just how many of the stores are only for a very niche demographic. They always seem empty.
    Department stores (target, walmart) and fast fashion chains (zara, h&m, F21) will only continue to grow their market share at everyone else’s expense and bleed Macy’s to death. Same with all these other mid-tier brands.
    I just imagine the majority of americans continuing to move more spending online and to a selection of fewer and fewer shops. Thus commercial real estate shrinking in most areas while growing in a few barring no large population gains.

  • Re: How’s Houston Looking One Month Out from Super Bowl
    I take the predicted economic impact with a grain of salt: 150,000 visitors over 10 days of “celebration” doesn’t seem to make a big dent in our gigantic local economy. I doubt any fan will be here for the full 10 days – pretty much a small contingent of sports reporters will be the only ones, I think. And, as the article noted, it is very variable on who will be playing.
    That said, I think there will be some small uptick in food and alcohol sales. But, no great shakes.

  • Macy’s and other mid-market department stores are suffering from competition from discounters (TJX, Ross), big box General Merchandise (Target, Walmart), the proliferation of outlet centers, and online shopping. Combine that with locations in malls that do not attract a significant segment of affluent shoppers, their closure is all but inevitable. Furthermore, malls that cater primarily to working and middle class shoppers, especially in large metro areas where lots of shopping alternatives exist, are also pretty much doomed. For these department stores and malls, their economic and financial models (where department stores depended on large markups and mall revenue was generated by elevated rents for the smaller in-line store spaces) simply don’t work anymore.
    As Niche said, there will continue to be a role for brick-and-mortar stores. But I have a feeling that decent customer service will be largely confined to the upscale segment; it will disappear (if it hasn’t already) from stores catering to other income segments. Middle-market department stores used to have good customer service, funded by the merchandise markups. As those markups are no longer sustainable in the competitive market, customer service goes away. So why go to the department store?

  • Summary of thoughts on the future of retail: the market found the most efficient way to deliver goods and we hate it.