Costco/Walmart are, from a European perspective, more like a "cash and carry" wholesaler masquerading as retail. There is very little effort made to present the goods, it's all about high volume and the lowest possible price. They're equivalent to our supermarkets/hypermarkets, but even bigger and broader in scope.
This might sound like I'm stanning for department stores but not really. They're way more expensive than Amazon or discount retail, priced more like a specialist, and the quality and expertise doesn't always match the presentation. You can easily end up paying specialist prices for Amazon quality if you're not careful.
Anyway, I think their time is up, perhaps with a few high-end exceptions surviving as a luxury tourist experience. In central London, we've a department store just for toys - like an old-fashioned and upmarket Toys'R'Us - and today's generation are basically un-wowed. Like, sure it has a lot of stock, but the big etail operators have a lot more again. And you don't have to travel 40 minutes to look at it.
Yes, exactly. To add to that, the salespeople in each department got a percentage sales commission. E.g. at Sears department store, the salesperson in jewelry dept was on a commission structure. The salesman working the Sears appliance center got a commission when the customer bought a washer & dryer or refrigerator; same situation in the Sears furniture department when a customer bought a sofa.
In contrast, the big-box discount stores like Walmart and HomeDepot have hourly paid employees without sales commissions.
In B2B, it's about a relationship and trust. My FIL sells clothes. He's the middleman between the manufacturers and the stores. He has a territory and based on what's happening in other stores in the region he can steer them toward the right stuff for their store. I.e., what's this store's target age range, how affluent is the area, and so on. In return, when he does a good job with them, they will learn to trust his advice on what will generally sell well, and he ends up getting better commissions. He sells about a dozen lines from about six manufacturers, though about three or four of the lines tend to make up the bulk of his income.
Since he's very good at his job, he can demand higher commissions than other salesmen just to take a line on. He's got the on-the-ground relationships, and a manufacturer will give him a bigger cut because he's not going to have canceled orders, returns, or headaches for them.
Same reason people are mean on the Internet
There's a local chocolate shop that has lots of turnover because they hire college girls to staff them most of the time. But the owner is on top of it, keeping good records, and about two weeks before Valentine's Day, they call me and say, Devilbunny, this is so-and-so from Chocolate Shop By You, you bought some chocolate-covered strawberries last year, would you like to order again this year? Yes, here's my credit card, and I'll pick them up after 3 pm on the 13th. Thank you, see you then. I walk up to the window, pick them up, bring them home, and say happy Valentine's. It's really the only thing she wants (I get her flowers but not roses - why be so cheesy when every other flower is like, half-price?) specifically. They make it easy to spend money with them instead of someone else. I don't have to wait more than a minute - they have a dedicated window for prepaid orders. That's service, and it's worth the small premium.
Back when I was a rich tech guy, the local Nordies would hold all the Ugg styles in my daughter's size and the next up for my daughter when the season started because the sales lady that worked with my daughter and wife had a relationship with them. It was an AMAZING shopping experience for my daughter. She was seen by the sales person. She felt special. And my daughter had some issues that made her feel less than special. But here was this beautiful sophisticated sales person not only seeing her, but helping her in areas she felt poor self worth in. And if you make my daughter feel special then I'm coming back to you year after year. But if I go in and am a random person to you, and you are to me, why pay Nordies prices?
We have a store here, John Lewis, whose tech department sells lots of Macs and high-end TVs.
So when they got in some 17 inch HP android tablets, I figured, surely they can't be _too_ bad? This was before iPad Pros, and I liked the idea of a large tablet.
The thing was absolute garbage, stuck on an already-obsolete Android release. At least their returns policy was accommodating, but that's half a day I'll never get back.
Also, RE staff commissions -- this isn't always bad for the customer as some here are implying. Although there are stores where commissions can come directly from the manufacturer, or where some manufacturers offer staff commissions but some don't -- this tends to be bad, nearly always.
On the other hand, if the commission comes from the employer, this can incentivize staff to build deeper product knowledge and awareness of tradeoffs between different brands and products (not to mention: mindfulness of trends, customer feedback and return rates, etc), which IME leads to better service and better sales for everyone involved. I mean, yes, sure, it can also lead to employees simply parroting whatever they learned from the manufacturer brochure. YMMV
Brick & mortar retailers that don't provide commissions at all often still allow manufacturer led trainings of staff -- the retailer views this as essentially free staff development and morale building by increasing staff product knowledge while often providing free product or steep discounts. Sometimes manufacturers will straight up give away prizes unrelated to the products they sell (I've seen supplement vendors give away iPhones or cash prizes, for instance). Sales reps sometimes build personal relationships with certain retail workers they know have influence over purchasing or merchandising decisions. Often this is explicitly forbidden, but in practice virtually every company that has rules like this also rarely enforces them
In any case, my point is that commission structures do not imply that you're getting bad/misleading information from sales staff, and lack of commission structures don't mean that sales staff are free of undue influence from sales reps and manufacturers or that they otherwise aren't incentivized somehow to push a particular product on you.
Costco _is_ wholesale, they just allow "members" to buy some of it too. Costco supplies quite a lot of things to enterprises such as office supplies and food.
The company has been through several ownership changes and bankruptcy in the past quarter century, and was at one point in fact owned by Toys "R" Us. Since 2016 it's been owned by ThreeSixty Group, of which also presently owns Sharper Image and Vornado.
That's been unusual in the United States for at least a generation. Nordstrom is a notable exception. Department stores have shed departments, too. The camera counters hung on for a while after other electronics and toys had gone to big box stores, but they've gone the way of the candy and nut counter.
https://www.nytimes.com/2018/10/18/business/sears-edward-lam...
Probably one of the worst business moves in the 2000s.
The normal term is "acculturated".
> Costco/Walmart ... There is very little effort made to present the goods, it's all about high volume and the lowest possible price.
I can see that perspective, but it's actually quite wrong. Costco (and similar) put significant effort into buying and presenting high quality goods. Their value proposition is that they don't need on-hand staff with relative expertise trying to match the consumer to product.
A century-plus of data on consumer buying habits have allowed them to engineer an environment where their value proposition is that they are only presenting to the customer good quality for price items. The limited, rotating, selection is Costco (and similar) putting their relative expertise on the shelf and there's tremendous money spent by these companies figuring out how to do this.
The "warehouse" environment is just another method to drive down costs in addition to eliminating pushy salespeople. Costco offers you usually one or two choices for an item, maybe for a few months, then it rotates out. Which one do you buy? It doesn't matter, they're both going to be of reasonable quality and value - a salesperson would try to direct a customer the same way. The stock rotation creates scarcity, but a good salesperson would let the consumer know "this sale is only valid for the next few days!" to create the same sense of urgency.
These companies have huge analytics departments figuring out where the dairy should be in relation to the car batteries, and for how long they should have the special display for fresh shrimp running.
Costco wants consumers to feel like they are getting wholesale prices. But the actual wholesale experience is completely different. Actual wholesale buying experiences are in some ways closer to the traditional buying experience. You're usually dealing with salespeople, hired by the originating company, who try to align you with the long tail of their product offering. Big wholesale markets even advertise that you get to meet salespeople and negotiate buying terms.
That's a subjective statement. Costco's brands and products have been so consistently poor (and overpriced), we switched to Sams Club.
The system is eating itself and we are at the point in this new cycle where it's showing.
I don't mean Costco haven't put thought into what they're doing, but there is no attempt to create a perception of aesthetic value - indeed, quite the opposite to communicate their no-frills value of "the most stuff for the least money".
I don't think so. Home Depot is clearly a big hardware store / lumber yard. Costco may carry many kinds of merchandise, shelved roughly according to type, I don't think it really qualifies as it has unspecialized staff (and very few of them), little selection within each type of item, and probably its only true "department" is the tire department.
The only thing you list that could arguably be a department store is Walmart, and I think the reason it's not recognized as one isn't because of its size, but because it's been drained of all glamor.
And none of them (at least in their non "super" sizes) are subjectively much bigger than the old mall department stores.
However, Australian/New Zealand Kmart stores have had no connection to American Kmart stores since the 90s, when Kmart Corporation sold them off to an Australian company that has managed them much more effectively.
One time while digging through a pile of 2x4s, an employee asked if I needed anything. I sarcastically asked what time they watered the lumber each day, so I could try to come get some before then. He just deadpan said "uh...I'm not sure."
It has the most bottom of the barrel staff and a lumber yard that sells... something... that barely qualifies as lumber. It is the epitome of modern American capitalism. It exists solely because it exists. No one would ever see a current Home Depot when visiting someone and say 'oh my god, please replace our current store(s) with this!'. But department stores used to offer experiences where people said that.
As an aside, I've lived away from urban areas for a while now, so maybe I am not the best judge, but I would be dumbstruck today by a first-rate window display in a downtown retail store.
These days if an adult wants to get even a basic unskilled labor job it takes weeks or months to get through the application and review process and the temp-to-hire run-around that follows it. The result is mostly the same for employers, they ultimately only hire people they feel they can count on and the extra overhead just represents a few more people in HR for them. But for employees, the lengthy process makes switching jobs a stressful ordeal of getting tangled in inhuman bureaucracy while your need to pay rent looms.
Trantor is the seat of a galactic empire with thousands if not millions of planets supplying its population. Skynet by Haliburton-Costco-TraderJoes will eat the world long before we're interplanetary.
I think it's an open question what happens to downtowns with the diminution of brick & mortar retail and people coming into offices (even if the latter has reversed in favor of office work more than some had predicted). A lot of cities have ebbed and flowed over time and there's no guarantee of a specific universal future pattern whatever some individuals may wish for.
As anecdata, when I graduated from grad school in the mid-eighties, other than Manhattan financial people, pretty much no one I knew went to live in a major city. In Massachusetts, none of the computer industry jobs were in Boston any lony longer.
A lot of it was bad luck. Sears shut down their catalog operation in 1993, because it was losing money, but if they'd held on for a few more years they'd have been in a prime position to be Amazon.
I did shop at Sears at one point especially after I bought a house but they became increasingly uninteresting relative to alternatives.
They had had a catalog operation and by some accounts class-leading (for the time) information systems. They had Prodigy and more or less successfully pivoted into making Prodigy an ISP. Undoubtedly they knew a lot of things Amazon had to figure out from scratch. The notion that Amazon was a great invention rather than just great execution is kind of risible.
Flip it around - what could Amazon have done with 1500 marginally profitable retail stores and a storied brand name? Sears kept the party going for a couple decades after the dotcom era, and still exists, so they weren't on the brink of folding back then. Note also that Sears' failure was not preordained: other brick-and-mortar retailers from the era have survived and even prospered.
That's not an issue of size; Walmart, Costco, and Home Depot are smaller than department stores are.
And department stores have gotten smaller over time; they used to be much bigger than they are now, which you can see by visiting a flagship store.