Why invest in a dying industry?

Brick mortar

Why invest in a dying industry?  It is a perfectly valid question.  With headlines screaming about the demise of brick & mortar or the losing battling with Amazon and on-line retailers, why would anyone be opening physical stores?  On-line retailers realize that people like to shop in different ways and multichannel retailers with a strong physical and virtual presence succeed.

So who is investing in the dying industry?  Pure players of e-commerce.  Late last year, Amazon opened their first bookstore in University Village in Seattle and the store has proven quite successful.  (More on that here: http://www.geekwire.com/2016/amazon-books/ ) This is in addition to the showroom they are experimenting with in Seattle.  Newegg is building on the success of their first store (Hybrid Center) in LA with a new store in Richmond Hill, Ont.  Blue Nile, the largest on-line retailer of diamonds, has been adding physical locations with their “webrooms.”

We also continue to see expansion from non-traditional retailers.  Look at Microsoft’s continuing retail store expansion.

Are these retailers creating some new type of brick & mortar stores?  No.  What they are  contributing to is the continued evolution of retail.  After all, catalog showrooms were popular from the 50s into the 80s. with companies like Service Merchandise and Best Products and many of these new “store” are an updated version of the concept.

Brick & mortar is far from dead and with new energy coming from these evolutionary retailers, it will have a long and fruitful future.



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