Massive changes in retail
After leaving a buying job at Macy’s, I jumped the fence to the world of wholesale, aka selling schmata to retailers. The world was a very different place and to really become a big wholesale business, you had to sell to Sears or JCPenney. The first order I got from Sears was for our best selling jacket. They tested it out with 2400 units which was a nice size order to start. The goods hit the store and I did what we did back then, I called the buyer to get the data around the number of units sold the first week.
The buyer was quite pleased with the sell-through and told me that she was going to write another order to roll the jacket into more stores. I really did not know what to expect. A few hours later, the fax machine spits out an order from Sears. The total order was for $1m worth of jackets. The trajectory of our business changed over night and it was my first $1m order. It was a big moment.
Fast forward, it appears that Sears, one of the most innovative stores in the past 100 years will probably cease to exist. It defines a turning point around the old brick and mortar businesses that did not see change coming and did not have leadership in place to be as nimble as the new kids on the block. The biggest kid on the block is Amazon. The chart above defines it all.
The fear of the new kid on the block, who is now the biggest and strongest, is that they become a bully. Sure they are buying a lot of interesting companies that have built something of significance that Amazon did not build themselves but there is an underlying fear of investing in businesses that compete with Amazon because people believe they simply can’t compete.
No doubt the future will see others besides Sears close their doors, but how do new kids on the block become relevant when there is a bully looming out there?