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while not directly related to audio - we can see many of the traditional B&WM stores closing down and even more of a drive to less expensive products.
I found it interesting.
From Simon Sinek (marketing consultant)
Retail sales in the US is about $5.5 trillion and is growing at about 3%.
The share of online sales is growing. Currently it is 7.5% and will be about 10% in 2019.
But this means that retail sales for bricks and mortar only stores are in decline.
While the article is nice and moralizing about the foolishness of millennial parents, it's about as uninformed as the criticisms that flow the other way. The data does not indicate any of the sanctimonious conclusions of the article.
Spending habits of ALL generations are slowly splitting into High/Low - where people find things they care about and really spend a lot (such as, the latest gadgets, fancy cars, stereos, vacations, etc. -- but it depends upon the person) and the rest of their spending is as cheap as they can get it.
This has hurt mid-market department stores the hardest. But this trend was well underway from the 1980's and 1990's.
Debt is an issue, but the people deepest in debt is millennials, and not just student loans.
"We have met the enemy and he is us" - Pogo
As a Canadian I cant relate much to this. I've only seen Applebees in movies and before this thread I had never heard of Ruby Tuesday. Amazon.ca? the price increase is crazy. I can get it cheaper at most local small chain B&M stores most of the time. Fancy cocktails? Only place I could get them until the last few years was at "hip" clubs and bars.
For us Canadians just substitute Applebees for "The Pantry" and Ruby Tuesday for White Spot or the Swiss Chalet. The sorts of Restaurants that after you drop $20 you think to yourself - man I just should have had a Big Mac combo it would probably be just as bad but for 1/3 the price.
I am not a big drinker so I would not know about the cocktails. Here in Hong Kong you will pay $10US ($13 Cad) for one in the party districts.
The main thing is buying power is vastly lower for millenials than boomers = back in the boomer era everything was relatively cheap from homes to education and jobs and even qualifications for jobs were minimal requiring only high school educations that for the same job today require 4+ year degrees.
So the notion they are more choosy about quality is only half true - they have to be choosy about quality because they only get one crack at it. They can't afford to buy a pair of jeans say that rip in 6 months. Back in the old days - meh it breaks you buy another one no big deal. But when your clothing budget for the years is $100 you have to make it count. Same for Applebees and the Pantry. If you have the $20 to eat middling crappy food then it doesn't bother you. But if you only have enough money to take yourself, wife and kids out for one restaurant meal every two months you damn well want that meal to be good.
The reasons these companies are going out of business is because there aren't enough people with enough disposable income to spend the money. The top 1% isn't going to eat at mediocre restaurants they are eating $80 a plate meals at Michelin star restaurants. The middle class goes and so do all the middle class targeted retailers. Heck in my town in Canada there are three dollar stores and a Value Village and a Walmart. I saw the same sort of thing on my vacation to Vegas. High end retailers and very low end retailers and the middle sort of getting killed unless it's somewhat famous like the Cheesecake Factory Hash-a-go-go but even these are middling quality with big portions in the hopes you don't notice that you are receiving slop.
We'll see what these Millenials do when they are 40-50years old. And it will be interesting to see which audio companies will manage to sell to a market of people who have no money. The more money they have to put out for food, medical, insurance will mean less money to spend on high end speakers and amps.
"The reasons these companies are going out of business is because there aren't enough people with enough disposable income to spend the money"
That's actually not true. Retail sales in the US is growing 3-3.5% a year. If what you said was true then the amount being spent would be lower year to year.
Try some mid priced items if you are having trouble. You might need to give up being "fashion forward" but that's what the extra money gets you.
Milennials are getting squeezed for housing as well as education - so is everyone else. Given communication networks and jobs, there is no need to live in the most expensive cities (which have never really been affordable for most people, just even less now). There are lots of options at least in the US (I know in Hong Kong there might not be).
We live in a sea of low price/low quality goods these days - you can and should seek out the middle priced goods.
But ... B&M shakeout is going on - it's not because the money isn't being spent - it is - it's just mid priced department stores, and mall stores (always low margin) are getting nailed because their lunches are being eaten by Amazon.
"We have met the enemy and he is us" - Pogo
The problem with all the articles I read like this is they all try to paint this generation or that generation with a broad brush.
I know many millenials that eat at chain restaurants and ones that want to live in big houses in the suburbs. I also know ones (like my Daughter) who are happy with their small apartment close to work and choose to spend their disposable income on travel and experiences like concerts, theatre, etc.
And as far as boomers go, I'd say there are just as many who are very frugal and cautious as there are that have lots of debt due to always wanting a bigger house or more stuff. As someone who is 60 and lived in the same house for almost 30 years (its paid off) I count myself in that group.
Businesses fail because they fail to provide products/services that people value plain and simple. Go to a Macy's or other department store and see if anyone (outside of the cosmetic/perfume sections) ever asks if you need help. When you find something you want to buy, you get in line at one of the two open checkstands. They don't have enough help so the merchandise is often all mixed up making it hard to find what you want so you really aren't getting any more value than buying something online, which is cheaper and easier.
On the other hand stores like Ace Hardware do a great business, which I think is because they have an abundance of people that actually want to help you find what you need. Yes. You pay a lot more than at Home Depot, but you get in and out quickly, with some confidence you have what you need.
As far as chain restaurants go, good riddance. I don't want crappy over-processed food served by a trainee when there are so many good alternatives.
Its all about me.
Millenials want an immediate experience instead of long term reality. Small artisan stores, curated cocktails etc- all about delivering a "new" experience rather than something generic that can be purchased by everyone. Reality is realizing you need to put some money away to afford a house, pay for school etc, instead of $16 Avacado Toast, or traveling the world.
HE audio can cater to this group by demonstrating the pursuit of HE reproduction can be a unique experience delivered by carefully chosen high quality (and value) products. The HE headphone sector has done a reasonably job of reaching out to the millenial consumer and the rest of the industry could learn from the success in this area.
B&M stores are not going anywhere and that was not the point of the article.
Millennials are far more sophisticated consumers than their Boomer parents and that is why many B&M stores have failed.
"We grew up watching our parents spend excessively on low quality, generic goods and then lose everything in the recession. We make less dollars and value them more. We work more. We expect more."
This is the point of the article. Boomers have never cared much about quality, service, etc. what they care about is quantity. They want to acquire as much cheap junk as humanly possible before they check out. That is not necessarily the case with Millennials. Given they have less than their Boomer parents they expect value for their money. Cheap junk at inflated prices and abysmal customer service does not cut it anymore.
B&M that cater to quality, at all price points, and focus on customer experience will survive. These are experiences that are hard to replicated on-line. Millennials like to go out and shop as much as their Boomer parents. B&M that give them what they want will thrive.
I live in downtown Kansas City, Missouri. Boomers ran to the suburbs decades ago. KC like many decaying urban cores has risen again. It is the hip spot to be, real estate is appreciating at the highest rate in the metro area new housing cannot be built fast enough, and it is largely populated by Millennials. Excellent B&M stores are everywhere in this part of town. No junk chain stores and not a single mall in site. B&M are mostly small specialty shops, locally owned, and cater to the more sophisticated Millennial clientele.
Boomers gave rise to quality. The high end audio phenomenon was a Boomer construct. I'm a Boomer. Boomers try to take care of what they purchase. Millennials think everything is disposable. Millennials are frivolous and jaded by advertising more than any previous generation. Look at the way they go through phones. Your premise just doesn't ring true with me...
Boomers have very little to do with it. The Millenials are not the children of Boomers, they are the children of the Me Generation. They are the Grandchildren of Boomers.
When they discover the center of the universe, a lot of people will be disappointed to discover they are not it. ~ Bernard Bailey
High end audio existed before Boomers it just was not called 'high end'. Early Marantz, McIntosh, etc. all high end starting in the 50s.
I don't think we need to be making fun of Millennials and their phones. Throwing stones at glass houses I suppose. Audiophile are far more fickle than any Millennial I have met.
I had no premise other than stating B&M stores aren't going anywhere. Just changing with the times at least the ones that wish to survive. Boomer's day in the sun is fading and Millennial's desire something different than their Boomer parents. Nothing odd in that it is the same with every generation the nature of things. And the Millennials I know are not nearly as concerned with massive acquisition of stuff. That is most definitely a Boomer thing. That does not mean Millennials don't want to buy and acquire things.
Most definitely a Boomer thing?
And the Millennials I know are not nearly as concerned with massive acquisition of stuff. That is most definitely a Boomer thing. That does not mean Millennials don't want to buy and acquire things.
Wait until they get married and want to have kids.
Personally, I loved small footprint urban living, but there are relatively few urban neighborhoods that are safe enough and family-friendly enough to give my kids the sort of childhood I want them to have. And I can't afford to live in them.
Most of the Millenials I work with are getting married in their late 20s, and after they turn 30 they want to have kids and end up buying a home in the suburbs. Once you buy a house in the suburbs, the accumulation of stuff begins. Furniture and home furnishings, appliances, large TVs, lawn tractors, power tools, clothes, and then kids stuff, piles and piles of kids stuff.
Yeah, when I was single, I could put all my stuff in a 14-foot box truck and get out of town. Once I got married, the stuff started to multiply. Now, with a four bedroom house, a yard, and two kids, I look around and think: "We need a bigger house, but I don't know how we'll ever be able to pack all this stuff!".
"We need a bigger house, but I don't know how we'll ever be able to pack all this stuff!".
And I have taken that as an invitation for reply. I know you didn't mean it, but here goes.
Most people have not been in business and do not know how it is. First of all, all costs must be considered and that includes the rent or whatever else service on the building in which you house your items. This can become significant in a one shop brick and mortar. It is like you are paying rent on everything you hope to sell. In fact at high volume places, every inch of shelf space is pretty much auctioned of to the fastest selling items.
But you are paying one way or the other, maybe rent, or possibly debt service on buying the place, not to mention heating, AC and whatever else. And if you a "floorplanned" then there is interest.
Every day you are in business costs you money. And don't think that online stores just get off for free. Sure they do not have to pay the nice looking boys for salesmen, and a few other things, but someone has to still pull and pack that order and get it down to UPS or whatever. that still costs money.
In the final analysis, being online instead of having a B&M does save you a few bucks, but it is not the be all and do all for everything. For one some people like to see and feel what they buy beforehand. (or hear) What's more is that it does not work all that well for food. I like to see and feel every piece of meat before buying it. I avoid buying meat on the street. They always came to the bars and I bought it now and then, but I never thought I got a really good deal. Sure it was half priced but it was only worth half as much.
I was replying to Dave_K's comments about getting married, having kids, buying a house, belongings multiplying, etc., not to the B&M vs online models.
But, to your points...
That was a very good and reasonably concise summary.
I've spent a lot of time in B&M retail, a couple were great and some just, well, you wonder how they stay in business (in fact, some of them are out of business or got bought out because someone saw the handwriting on the wall.) Remember Playback, Computerland, and CompuShop? I worked at 'em all, and two of the things they had in common were: Costs were too high, which made margins inadequate longterm, and, they failed to keep up with the changing buyer wants and needs.
Remember the Mindset personal computer? Probably not. Search back to 1984. CompuShop had the brilliant foresight to pick up the product because - drum roll please - the CompuShop owner and the Mindset owners used to work together at Sears. The product died within a year. But I still have their little promotional digital desk clock - and it still works! Hahaha! How's that for irony!
Well 51 you do seem to have a grasp of it, many do not.
But the world is changing, and your new toys are going to be arriving via UPS or whatever. It is time to get used to it.
Brick and mortar are more for places where I buy steaks and can see each one of them before buying and pick the best ones of course. Or maybe restaurants, places like that. But really, I need a 75 foot CAT5 cable, I don't need to go to a store. I just need some guy to roll off that much footage and crip the connectors on. I do not need their packaging and marketing costs added in. I got prices from like seven bucks to forty. If one can do it for seven bucks, why is the other one forty ?
You know why and I know why and we all do not want to pay it.
Yeah, I tend to agree about buying food. Even though there are online ways to buy from local grocery stores and have it delivered, I want to choose my stuff (THIS zucchini, not that one!). Besides, I need to get out.
I've spent several vacations in Europe, primarily Switzerland, and saw how people bought their groceries. They'd go to the store virtually every day, rather than the typical American way of stocking up for the week and just picking up odds and ends during the week. 'Course, they (in Europe) do it that way because electricity is expensive and, for the most part, they don't have large refrigerators (also because many apartments and even homes are rather small-ish. I got into the habit from that experience and still go the grocery store almost every day. I cannot imagine ordering lettuce, zucchini, apples, bananas, steak, seafood, etc. online.
Other stuff, I can go either way. I'm fortunate to have an Altex Electronics 2 miles away, and a Fry's Electronics 10 miles. Besides, like I say, I need to get out. But it's probably been 10 years since I bought a book or DVD at a B&M store. One thing I DON'T do is to go see or audition an electronics component and then go buy it online from somewhere - that's skanky.
Have there been facile boomers interested only in having "stuff"? Sure. And have there been thoughtful, conscientious boomers interested in quality? That question gets a "sure" also.
The same is true of every generation that has both preceded and followed the boomers.
Technology may evolve, but human nature and the wide range of human behavior stays the same.
I too, have difficultly relating with this sentiment:
Boomers have never cared much about quality, service, etc.
That has always been how I've approached the market. And delivering "A" player service has always been a part of my job. What percent of your Sound Lab buyers are millennials? :)
And, my nest egg is doing quite well, thank you. Yes, there was a 40% drop in 2008 followed by a 39.2% gain the next year followed by other strong increases.
I have never bought cheap junk. I have always researched and bought the best products I could afford. We tend to shop at smaller family owned B&Ms that are family owned and run.
We lived in a cool area when we first married- historic district, older houses being refurbished. We bought and fixed up an older house. We could walk to restaurants and bars. We rode bikes to Sunday breakfast and jogged by street cars and multi-million dollar houses. We moved to the burbs when our first child was one. Why? Safer neighborhood and better schools.
My kids are millennials. One lives in a tiny apartment in a cool and very expensive neighborhood he will never be able to buy a house in short of a career change. They can walk to cool restaurants. It is a very nice area. I expect they will move to a more sensible area when they have kids. My oldest already lives in the burbs.
Certainly there are boomers that appreciate and find value in quality goods. I am a Boomer and don't buy junk.
But as a generation Boomer's are interested in having lots of stuff. Quality is optional.
You must feel oh so superior to the rest of us Boomers. Most of us pretty much had to learn life lessons beginning at a young age and started out buying the inexpensive (and cheap - there is a difference!) things that we could afford, then over the years transitioned to the higher quality stuff after becoming aware of the differences through trial and error along with our own hard work.
Every new generation that comes along seems to blame a preceding generation for its woes as opposed to looking at themselves for the true answer. I remember the same kind of bullshit from the Gen X'ers.
Millenials - get a life, for Crissakes!
I don't feel superior to anyone. Not my nature. And I am not blaming anyone or any generation of anything. Just pointing out that Millennials have different desires than their Boomer parents.
The reason we have more stuff is cause we been around three times longer plus we've inherited all our parents' stuff. Check back with those milennials in another 30 years and see how much they've accumulated.
Quality over quantity... what a concept!
"Once this was all Black Plasma and Imagination" -Michael McClure
...for two primary reasons:
1. it's cheaper
2. it's easier and faster
...than going to a retail store for many things.
I'm one of the 37% of households that have an Amazon Prime account.
And I own a retail store so I know.
Audio stores closed because their customers got older and stopped buying new equipment. Many preferred the lower prices of used stuff.
But where some items are concerned - books, for example - Amazon is opening new B & M bookstores because people like the experience of looking at and finding new books.
That was the main reason I started, and continue to buy online.
B & M store just don't carry the things I want, and they haven't in about 20 years or so. They are just too limited in most cases.
the concept and importance of the customer experience . My employer thrives on doing a better job than our competition.
So please, old people, quit writing articles about how tragic it is that Ruby Tuesdays is going out of business.
Just today, I got a LinkedIn article which speaks to that issue:
Amazon didn't kill the retail industry
I haven't read the article - I don't go to sites which are unknown and suspect of being a source of malware.
But I do agree that it's not surprising that Ruby Tuesday is going out of business. I've been aware of the company, passing their locations on the roads, for at least 20 years. Never been in one. Maybe they should have tried doing some advertising.
Service used to be king and then it completely disappeared. An example is Best Buy and chains like it. I asked them if something breaks do I return it here. No if it fails I would have to ship it to Sony or HP or whatever the item was.
Huh? Then why would I not buy the exact same items for $100s less online if I'm going to have to do all the work myself if something fails - in other words what the heck is the point of the B&M store? Since most of the time I know more about the product they're selling me than they do - and there is no service should it fail.
I live in Asia so I have gotten used to paying $4-$10 15-30 minute taxi rides. So it's a huge shock going back to the west and Paying $10 (plus an expected tip) for a ride less than 2km.
And hotels in Vancouver have become utterly obscenely priced. The River Rock by the Vancouver airport this summer will run $420 a night plus tax. The worst hotels in the worst part of town will run $150 - and you'll probably step on a heroine needle. B&B all the way. Seattle is doing the same thing - the Blue Jays go to Seattle once a year and usually have more fans attending that Seattle fans - it's a Jay's home game almost. But this year they have jacked up the prices at the hotels and I believe also the game tickets. I get it try to cash in but you get greedy and down the line you might shoot yourself in the foot - Blockbuster Video.
I do understand what the writer was talking about with certain businesses that seem to cater to older generations because you can physically see the kinds of shoppers that seem to keep certain stores afloat. I ate at an Applebees....Once. And while we disagree on some financial issues she talks about one thing most will agree on that finance courses should be core subjects and dealt with more seriously. People need to take responsibility for themselves and not rely on everyone else, government, to solve their problems.
Living in Hong Kong I see tremendous financial literacy and tax form that is four pages. Everyone pays their tax at the end of the year in two lump sum payments 80% in January and 20% in April. Not taken off every cheque etc. This writer alludes to this but man streamlined from the government on down - but it takes a public that knows how to save and be ready to make a $30,000 tax payment and not blow it all and then can't pay at the end of the year. Not like some people I know who get their $3,000 paycheque on Friday and have $400 left on Monday because of drinking and gambling all weekend. Her point out about making less and spending smarter will likely serve her as a benefit later in life.
Yes, they have stores, but they also have a huge on-line presence and when I call my local store there is no way to speak to a person... you just go round and round in their phone system.
All I wanted to know is if they had a certain TV on display.
You can't find that out on the phone... but if you key in the Best Buy SKU # for that item you can find out if its in stock.
For me, any store you call and a person doesn't pick up the phone is not true B&M.
They miss the point entirely.
reelsmith's axiom: Its going to be used equipment when I sell it, so it may as well be used equipment when I buy it.
The internet has separated the control of access to goods, services and information from physical gateways or controllers of content.
In education, it's not enough to control access to knowledge (you don't any more). For news, traditional networks are - even as we speak - fighting battles to retain control over what is news and what isn't. Cinemas have had to rethink what they are offering if their core USP is available online.
Truthfully, any physical business which will survive, is augmenting its core offering and focusing on the experience more completely. Schools focus on their star educators and boost the overall learning and student experience. Cinemas emphasise the social dimensions or other additional local USPs if they have them. Broadcasters increasingly focus on their ability to curate content and produce new material themselves (Netflix and Amazon productions, HBO original series).
So, audio B&M stores could do the same: system set-up, room treatments, kit-building, acoustic theory lessons, recording technique classes, etc etc. Adding music sales and booths for listening (per the past). Stores which realise this will survive. Box-shifters will (and are) lose the fight to the online distribution centre.
C'est la guerre.
"... only a very few individuals understand as yet that personal salvation is a contradiction in terms."
Ridiculous to state that Boomers bought more stuff of lesser quality and that Millennials are more sophisticated consumers. Exactly that sort of statement is the essence of the problem. The world has changed and so has the experience of buying stuff. "More or less" is polarizing; it's not more or less, it is sure as hell different.
Which of your kids have ability to make nuanced decisions on what they want to buy? Actually I can expand that to people in general not just our kids. The ability to see products, to feel, to hear, to smell the store, to experience the "experience" with more than a visual representation of what they might receive. Seems like we're in a trickle over economy where someone sees something first on the internet, tells his or her friends, they buy it (or not), etc. There is less and less of the experience now and more of a binary on/off switch based upon reviews by other people. Not more sophisticated, just different.
Jeff Bezos is defining the future of shopping now with B&M bookstores and acquisitions like Whole Foods. I wonder what it's going to be!
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