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Comment by marcinzm | Hacker News Reader

Retailers didn't ignore Amazon, they were just very bad at technology since they were never technology driven companies. They spent decades fighting each other in a very low margin business and were optimized for that. Walmart did the best but that was through buying out other companies and even they didn't do great.

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In the time between when Amazon became a clear threat and now, students have started university and gone on to IPOed billion dollar companies.

At this point being bad at technology is just incompetence/laziness/refusal to invest.

And that's a pretty good description of Canadian retail. Most Canadian retailers just charge what US mail-order retailers do, plus typical shipping and duties.

There are a lot of soft targets in Canadian retail. The Hudson's Bay Company is one of them.

I actually wrote a blog post on this when I was purchasing shoes:

https://gaiser.io/amazon-is-winning-as-everyone-else-isnt-tr...

I need wide shoes. I could not find a place to buy wide running shoes besides Amazon at the usual places. My typical shoe buying places did not have a way to search for wides online.

I admit that I didn't really check all that exhaustively, but past experience has taught me that other retailers besides Amazon are not worth the clicks.

Yeah - it's frustrating how bad Canadian retail is still. I had an experience a few years ago with Canadian Tire where I chose in-store pick-up for an online purchase. The people at the store looked at me like I was from Mars. They didn't have the item in stock, and the manager actually told me that

1. he couldn't refund me because it was two separate computer systems (a lawyer would have told him tough sh*t - you're still the same company), and

2. I should do a credit-card charge-back to get my money back!

It's been years since, and I'm trying them again now. I ordered a set of dumbbells yesterday and ... still no email to come pick up my in-stock dumbbells.

BTW - I have wide feet too. If you're looking for running shoes, ASICS is good (this is the brand I always wear), and I've heard New Balance is pretty wide too. I can't wear Nike or Reebok for this reason.

I have wide feet and I buy all my runners through the New Balance store. Never an issue.

Wow. And, my order for the dumbbells was...cancelled! They sold my item to someone and cancelled my order.

Canadian retail is still such a cluster-f*ck.

Yep lol. This has happened to my Dad too.

Ten years ago I tried to buy a blazer in Downtown Vancouver.

I could not find one larger than a size 38 without going to Mr. Big and Tall, where the blazers would fit my size 48 chest but had enough extra room around the waist to store a couple of toddlers.

I had the same experience with width of glasses frames, with shirts, and with any good that fell outside of a single standard deviation from the average.

There's a paper where researchers compare the "average" sizes for human factors to individual people and discover that people who fit all the averages are vanishingly rare. Almost everybody is outside a deviation for at least one characteristic. I wish I'd bookmarked it.

Canadian retailers just stock within the one deviation and shrug. I specifically went to the Bay for that blazer.

It was a US military study for fighter plane cockpit ergonomics. They had accidentally designed cockpits to be suboptimal for all pilots.

https://www.google.ca/amp/s/www.thestar.com/amp/news/insight...

From talking with Canadians, are folks happy with that?

Target didn't stay very long in Canada.

It seems every store has a "Canadian alternative" that's just pricier and has less product. I always hear about cross border shopping being done in the US to bring back goods in Canada but never the other way around. Even for cars it seems the same car will sell for way much north of the border.

Target made two mistakes. The first was making a deal to lease all the former Zellers locations, which was too many to handle at the start. The second, was to rely on their US-based logistics software that wasn't capable of handling multi-country inventory and tracking (like different currencies).

I loved Target. As a single dad, I loved the variety of kids clothes they had. They still carried the brands that Zellers did but they had their own from the US too. I was so disappointed when I heard they were leaving. I didn’t believe it at first but sadly it turned out to be true.

You're a retailer with 0.5% profit margin, how do you rebuild your whole business model and technology philosophy without going bankrupt first due to the costs? Remember that your competitors are using their money to kill you short term throughout the whole time. Of course they refused to invest, they didn't have the money to invest with and the risk was too high to any individual retailer.

edit: Also, e-commerce was only 16% of retail sales pre-covid. And that took 30 years to achieve. So traditional retailers saw it more of a long term problem than something to worry about right now.

Why would brick and mortar retailers need to find through profit margins, but amazon didn't? If amazon could convince people to give them money and forego immediate profitability, I don't see why the same wouldn't be possible for e.g. hudson.com, (which is not as mighty as the amazon, but has more commerce flowing through it than the Amazon)

Why would an investor pay money for hudson's e-commerce bet (keeping in mind that their investment will grow proportionally to hudson's overall growth not the growth of their e-commerce division) versus just investing in a pure e-commerce company?

Just to add as well the point of a company isn't to survive forever but rather make a return on the investment. For a lot of these retailers it's somewhat inevitable e-commerce will take a large portion of their marketshare. The best move might just be to extract profit while they remain above water.

0.5% of $5B is $25M. Add that to your existing IT budget and make a start of it. It's do or die.

For somebody like Walmart, 0.5% of $500B is $2.5B. That's more than a little outside of SF.

>It's do or die.

In 20+ years. An investor in a retail company would prefer stable guaranteed returns for the next 10 years rather than lower returns for the next 10 years with a chance of higher return afterwards.

Companies are not people, they do not act like people and their rational goals are not the same as those of people.

edit: And, btw, Walmart HAS invested untold billions into e-commerce. They spent $3.3 BILLION on Jet.com alone.

Same as any other business: you raise capital for technology improvements through secondary stock offerings or bond sales. There's a surplus of investment capital out there available to any company that can sell a good story to investors.

Swedish companies did this just fine for a much smaller market than the American and the margins here are no higher and the competition was also fierce. No, I think it has to do with the American retailers bring too big to be able to quickly adapt.

Typical retailers have around 20% to 40% gross margins and about 6% net margins (on average). Even grocery stores (the sector with the thinnest margins) do better than 0.5% at around 2% net margins on average.

Large retailers can easily afford to to build good technology. The problem for them is not one of financing, it's culture. Most retailers, even "luxury retailers", have a deeply engrained culture of being extremely frugal. I once worked servicing that sector and recall visiting a higher end jewelry retailer. The store area that customers can see was very posh and slick. But step into the back office and everything was dingy and run down. This sort of thing is a conscious decision on their part.

Most of these firms will NOT pay top dollar to hire the best talent even if they could afford it. Most do not understand software development even a little bit. Most do not understand the role of technology for anything other than record keeping (at best). But (usually) they're not run by idiots either. So when they recognize these issues and try to isolate the "online" retail from the rest of the firm (e.g. Walmart), it creates a substantial amount of friction and rivalry. I've seen it first hand and, sadly, there is no simple solution.

They don't have to compete with Amazon on technology, they can instead offer better service, or a better curated selection of (actually fit-for-purpose) products, or better prices, or better discoverability.

But some retailers seem determined to be worse than Amazon in everything, which is quite the feat. It probably is a result from being locked into a race to the bottom against other brick-and-mortar retailers, as you mentioned.

Without good technology you cannot achieve any of the things you mentioned better than Amazon without spending so much money (on humans, etc.) that you lose anyway. Amazon's technology gives them higher margins and thus they can use that money on things like lower prices, better service, etc. Their other technologies allow them to do recommendations and other automatically curated approaches without spending money on humans to maintain everything.

edit: Seriously, retailers have something like 0.5-1.0% profit margin, it's abysmal, they don't have the leeway to compete with on anything that costs them more.

This is a great point, but I think in 2020 the stakes are a lot higher for offering "better curated selection of products", "better discoverability", and "better service". The first two, for any retailer, really mean either being very very niche, to the point where inventory variety has been reduced to tractability, or it means being data-driven and predictive. And that probably means being tech-savvy.

exactly the void Shopify fills

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