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Death of Sears: The End of Brick and Mortar Stores (and What will Replace Them)

Updated on July 27, 2016
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Dr. Penny Pincher founded the popular personal finance blog Penny Pincher Journal in 2013 and has published two books about saving money.

Sears- Last 13 Days
Sears- Last 13 Days | Source

The End of Brick and Mortar Stores has Arrived

Tonight I saw a sight that made me realize that brick and mortar stores as we know them are dying. The Sears store at the mall in Coralville, Iowa is closing.

The Iowa City/Coralville/North Liberty area is one of the fastest growing areas in the state and probably the region. New houses are going up at a steady clip, each being outfitted with new appliances purchased somewhere. The growing number of families must be buying clothes for themselves and their kids somewhere other than the "softer side of Sears". People are buying electronics for their house like blu-ray players and flat screen TVs, and riding lawn mowers for their yards, and tools for their garages, but not at Sears anymore. People are driving cars that need oil changes and new tires from somewhere other than Sears Auto Center now.

I was struck by the incongruity of a store plastered with "Going Out of Business" signs at a very prosperous mall in a very prosperous community. The Coral Ridge Mall is a shopping destination- people take tour buses from surrounding states for a weekend of shopping at this mall. If a store like Sears can't make it in this environment, they're doomed.

Sears Store Closing
Sears Store Closing | Source

Not just Sears- all Brick and Mortar Department Stores are Doomed...

The future of brick and mortar retail department stores could look a lot like what happened to downtown shopping districts. Before the 1950s, shopping was done in stores downtown- urban sprawl and large stores outside downtown did not exist Retail shopping was concentrated in downtown shopping areas with stores- small by today's standards- with parking on the street or in small parking lots. This era was almost entirely before my time, although I remember as a small child going with my father to buy a TV set ("set" was part of the name then) at a Mom and Pop TV shop. Nearby was a furniture store and a sporting goods store. I'm sure all of these downtown stores have been closed for at least 30 years now. The downtown shopping paradigm was replaced by something more efficient and better able to attract shoppers- giant department stores and shopping malls. The old consumer commerce model based on shopping in smaller stores concentrated in downtown areas died over a period of a decade or so.

It's happening again. The way people want to shop is evolving rapidly. I have heard stories of people stopping into Best Buy to check out electronics, and then going home to order on-line at better prices. This is happening often enough that it is causing problems for sales at Best Buy. In fact, I remember the last time I bought an appliance at Sears, the salesman actually directed me to a computer at the store to search for the appliance I wanted on the Sears website. And I was happier with this arrangement than limiting my options to what happened to be left on the sales floor. All that I really needed from Sears in this transaction was to deliver the appliance.

The sun has set on Sears
The sun has set on Sears | Source

The Future is a Virtual Experience... followed by a box delivered to your house

Technology will only make shopping at home easier. What about the need for a sales floor where people can "kick the tires" before they buy something? Think high def 3D display of products on your screen at home. People love their screens. Think tactile virtual reality interfaces where you can basically touch and play with products in your home (or at work, or at the coffee shop) before you buy them. Science fiction? Not for long. This sort of technology could become commonplace within a span of a few short years. Both entertainment an e-commerce are pushing in this direction.

I think the greatest hurdle to virtual shopping experiences will not be the technology to allow consumers to have a satisfying virtual shopping experience. The limitation will be getting the box to the consumer fast enough. Maybe some of the buildings that are now giant department stores could become warehouses to allow same-day delivery of e-commerce products.

There is big money to be made by taking the efficiency of selling consumer products to the next level. And consumers will love it. An important aspect of shopping these days is the sport of getting a great deal. That's why people line up at 4am on Black Friday. I think Black Friday actually started on Thursday this year. It's about getting the best deal, and soon the best deal will always be on-line. At a virtual store or e-commerce site, not at a brick and mortar store. Why? Because brick and mortar stores are less efficient. There's no way around it. You have a huge facility to maintain, lots of employees, inventory tied up in displays. The e-commerce model cuts out a lot of these expenses and gives more selection and power to the consumer. It's the way of the future.

The Future of Local Shopping

Some types of stores will still make sense in a brick and mortar format, such as: grocery stores, pharmacies, vehicle maintenance shops, opticians,barber shops, and maybe a future version of Walmart. I guess the current Walmart format includes a grocery store, pharmacy, auto shop, optician, and barbershop- so maybe just Walmarts. I can imagine a hybrid of brick and mortar and e-commerce where you place your Walmart order on-line and receive your items at a quick and easy drive-through or maybe even free home delivery. Would you spend Saturday afternoon shopping in Walmart if you could have your items delivered for free? How could Walmart deliver for free? Of course, the delivery will be made by a driverless car running on solar power- don't forget we're talkng about the future.

Last Days of Sears

Now I'll try to relax a bit. The future isn't here yet. As the sign says, we have 13 days left. Coralville Sears has some nice winter coats for 70% off including some down-lined roll-up coats for $25. Also some pants for sale cheap if you happen to have a waist size 42 inches or larger. And 60% off bicycle accessories. Not to mention a few brand new 1/2 price bikes. I like cheap bikes. Maybe I'll look on the bright side of this...

© 2013 Dr Penny Pincher


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