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Mike Larson, Money and Markets columnist and editor of the Safe Money Report, is out today. Mark Najarian, the managing editor of Money and Markets, is filling in …
There was a time when people were saying that mega-stores such as Wal-Mart (WMT, Weiss Rating: B) were putting other, more-traditional shops out of business. Now Wal-Mart and many other similar big names are in danger of becoming the new “more-traditional”-type stores potentially being bested by the online mega-store: Amazon.
This week, CNBC put out a list reminding us of retailers that have gone out of business in recent years. The names were those that many of us grew up with. The likes of Circuit City. CompUSA. Blockbuster. Borders Books & Music, Tower Records, KB Toys, Woolworth, Mervyn’s just memories now.
It’s possible many other brick-and-mortar stores will join that list in future years. Which ones? Most likely, the companies that sit around and complain that Amazon and other online sellers are destroying their businesses and then do nothing about it. The ones that live on will be the ones that can beat Amazon and other online retailers at their own game. The ones that will use their physical properties as showrooms that allow shoppers to easily buy goods at the cashier or with Wi-Fi connections in-store or allow them to pick out products that they can purchase online at home — not on Amazon but with the shops’ own websites.
“How effective the changes will be is one of the most intriguing developments in the retail sector.”
Wal-Mart certainly isn’t in danger of joining the list of former retailers. Nevertheless, it can’t stand still if it wants to grow, and it appears to be looking to battle Amazon head-on. (A sign of how well Wal-Mart has been doing recently will come Thursday, when it reports quarterly results. Its performance could have an impact on the entire sector, and analysts are looking for a slight decline in profit.)
This week, it announced that it is rebuilding its website to make shopping more personalized and simpler. The changes start in August and others will be rolled out in the next few months. It’s a major revamp, with changes being developed by Wal-Mart’s @WalmartLabs technological division.
The initial changes, the company says, will allow the website to show shoppers more products that are linked to their previous purchases, and will customize the website for each shopper based on where they live, with weather reports and local events.
How effective this all will be is one of the most intriguing developments in the retail sector. Other retailers — brick-and-mortar drugstores, book shops, sporting-goods stores, etc. — will be watching carefully to see how successful this effort is and whether they match or surpass the strategy of Wal-Mart — a chain that has revolutionized retailing more than once in the past.
Wal-Mart hopes that a revamped website will allow it to compete more effectively with online retailers.
Just yesterday, Google (GOOG, Weiss Rating: C+) and Barnes & Noble (BKS, Weiss Ratings: C-) started a service that allows book buyers in Manhattan, San Francisco and Los Angeles to get any B&N item delivered the same day through Google Shopping Express, a direct challenge to Amazon. How will other retailers, such as Target Corp. (TGT, Weiss Rating: C+), and legendary retailer Sears Holdings Corp. (SHLD, Weiss Ratings: D) respond? Which retailers do you, as a shopper, think are best-placed to remain relevant in the future and what do they need to do to keep you shopping with them instead in this new era?
In a recent Money and Markets column, we received many comments from readers who love the shopping experience of Amazon. Although, interestingly, most said they wouldn’t invest in Amazon, which posted a $126 million loss last quarter.
What about you? Do you prefer to shop with Amazon? (Disclosure: I use Amazon — A LOT!) Or would you welcome the chance to browse bookstores, electronic shops or clothing stores in person, then connect through in-store Wi-Fi and buy online through that individual store’s site?
What does a store like Wal-Mart — or any of the other now-traditional physical stores — need to do to win you over from an Amazon? I am interested in getting your viewpoint. You can join the discussion here.
OUR READERS SPEAK
My colleague Mandeep Rai’s column yesterday on the jobs situation drew a heavy response from readers. Many lamented the lack of growth in high-quality jobs, something that could clearly be seen in the most recent government numbers.
Reader Mitch said: “The temporary jobs hiring with its low pay and no benefits covers most employment in the workforce hiring today. … Any hiring is in the service sectors, period. We know what they pay.”
Hi, Mitch. Thanks for your comments. You made some good points. What do you, or anyone else, think is needed to get American companies to add full-time, quality jobs? — Mark
Another reader added: “Back in the 1970s and 80s when jobs were going overseas, and we were promised they were the bad jobs that no one wanted, I knew we were headed for trouble. And here we are.”
Reader M relates a personal story: “After being laid off a year ago I’ve only found one month’s work. Luckily I’ve saved enough money to live on. Calling it early retirement, at a very healthy 62. If the stock market crashes I will be in real trouble. … One day at a time now. Helping at the local food bank has shown me how bad it really is. More people show up every day.”
Hi, M. I was wondering if you would now prefer a full-time job in line with what you were previously doing or, given that you say you’ve saved enough money, would you prefer to remain in “early retirement” and continue volunteer work? It can be a tough decision — enjoy being out of the rat race or miss the challenges and financial security of full-time work. – Mark
OTHER DEVELOPMENTS OF THE DAY
One dramatic development is on the minds of a lot of people right now, so we’ll stick to that story today.
U.S. warplanes bombed Islamic fighters who were advancing on the Iraqi Kurdish capital of Irbil, a day after President Obama authorized limited airstrikes to protect U.S. interests there. The militants had moved to within a half-hour’s drive of Irbil, according to Reuters reports.
The move comes after the advancing militants in northern Iraq forced tens of thousands of Christians and other members of Iraqi minority communities to flee for safety.The Pentagon said Friday that two F/A-18 jets from an aircraft carrier based in the Gulf had bombed an artillery piece that was being used by fighters to shell Kurdish forces defending Irbil. Kurds have established a semi-autonomous region in northern Iraq in the years following the U.S. invasion of that country.
U.S. troops pulled out of Iraq in 2011, but there are American military and consular personnel in the Kurdish region.
What’s your view on the latest moves in Iraq? Should the U.S. use airstrikes to protect U.S. personnel and religious minorities in that country? Or should we restrict any action to the rescue and extraction of U.S. personnel? Will this all lead to “boots on the ground” in that country?
The president has vowed that no ground troops will be sent to Iraq, but obviously nothing is 100 percent certain in a war zone. These are all important questions, so let us know what you’re thinking about this situation and any other items by clicking here.
Best wishes,
Mark Najarian
(Mike Larson is on assignment. His regular afternoon column will return Tuesday.)
P.S. Our Top Stocks Under $10 service recommended buying WRES at $2.93 a share last September. Now it’s around $5.80. Another recommended stock was up more than 11 percent — yesterday alone! To get onboard for our next picks, click here.
The post How Retailers Can Compete With Online Giants appeared first on Money and Markets - Financial Advice | Financial Investment Newsletter.