The retail world is changing right in front of us. 12 inches away on our computer screens and 6 inches away on our smart phones. Many don’t see it. What we do see is access to lower price products from around the world. Lower prices are a good thing ..right?……..Well maybe not.
I’ll be right up front, I have been in the process of changing our business from a fine high end watch and jewelry store …to more of a service base store for fine watch and jewelry repair. Also we do buy used jewelry and watches that can be restored and resold……..or we recycle ( refine and assay) gold ( old jewelry), silver ( usually sterling flat ware, spoons and forks) and platinum that can then be repurposed towards new applications. All in all , a green activity with money going back to the seller. We of course still sell jewelry and watches as well. Basically repairs are best done “in person” in a store like ours. Selling some old jewelry and or watches for any reason, is also best done “in person”. That process doesn’t translate easily to the internet.
As retail moves more and more on-line, like it is for fine jewelry and watches, as well as many other product categories in general, there will be downward pressure on pricing. Sound like a good thing…right? After all, we all want a good deal. The unintended consequence will be purchasing that is “delayed”. Meaning, buyers will wait for prices to go down, they will look for that better deal. With the web, it is so easy to do that. Of course buying is done every day. But the overall trend is downward pressure and as consumers, we are seeing this in real time…….six inches away on our smart phones. The “mind set” is……well maybe tomorrow I’ll find it cheaper somewhere else. The fact is, you probably will!
We are starting to see the retail giants, anchors stores like Macy and Nordstrom, see this happening to their sales. Primarily, buyers just rather go on-line to purchase for convenience sake. Then they start to realize the… “better deals” to be had. Consumers leave the brick and motor all together. Now the on-line stores will have to compete more and more with other on-line stores. The clear sign of this is these larger stores are starting to announce store closings. Get ready for more of that. It is just a matter of time.
The race to the bottom is, as the larger stores leave the retail stage, they will employ less people. Buildings will become vacant and landlords will start to have a harder time finding new tenants…..thus new pressure on prices going down on commercial real estate values because of lack of tenants. You can see where I am going with this. It will spread to other areas of the economy. I think the economist call it deflation. We have an economy built on consumption ( spending). That holds it all together. That is why the experts ( Feds) try to build in inflation ( prices going up)…….so consumers will spend now before the price goes up. Instead, technology has created a “race to the bottom”………delayed purchasing…….because we can find it cheaper and we can always do that tomorrow.
Next time you buy on line ( me too)…….that is a step towards that reality. It is not a good thing…at least in the big picture……..but it is only my opinion sitting out here on the retail wars front lines.