Here is another example. I swim in the San Francisco Bay and need something to keep my goggles from fogging up. Once you figure out what gets you through your open-water swim without your goggles fogging up, you stick to it. Some people use baby shampoo. Others spit into their goggles.
Others buy specialized products. There are lots of choices. So last week, I drove to my nearest sporting goods store. They only carry the big-company brand. Once back home, I ordered it online directly from the manufacturer in the US.
It arrived via USPS in my mailbox today. The chart above shows sales at brick-and-mortar sporting goods stores as a rolling month total to iron out the enormous seasonality. And staff was nearly absent. The cost cutters had taken over from the merchandisers. It was obvious. Once back home, I went online, found a new brand, and bought from the company that makes them. It took five minutes. And that was the last time I tried to go to a brick-and-mortar store to buy clothes. None of these deals involved Amazon.
Cost-cutting by reducing inventories and getting rid of staff is the fastest way of killing a brick-and-mortar store. The City, trying to keep some retail in what used to be the retail center of San Francisco that draws a lot of tourists, specified that the first three floors would have to be retail, including restaurants, otherwise it would all have been converted to office. The internet has an unlimited inventory, and what took two hours and often without success, now takes five minutes, success nearly guaranteed.
So here is what is happening to sales at department stores:. Nordstrom reported quarterly earnings this week. Other retailers keep that a secret because it would show just how terrible their brick-and-mortar stores are doing. This has been going on for years. These retailers are trying desperately to obfuscate to what extent dollar revenues at their stores are slumping. But they do want to brag about the online sales successes. Hence the twisted metrics. This is a huge increase. But total net sales in the US, including eCommerce, only rose 3.
