The future of small business and retailing...

[willister]

So Hardly Normal says retailing will suffer an imminent death...what are your thoughts about retailing & small business in Australia? My prediction is within the next 5-10 years, all shopping centres will house just bigger name brands, dare I say some smaller shopping centres will even shut down/become warehouses/distribution points for the big boys.

Times are tough but things will get even tougher....everyday you open up the newspapers are see [insert name here] bankrupt, out of business, verge of bankruptcy or for sale. I also think it's not cyclical either, it's not like where there is a recession and things will pick up....

Rent and wages are the biggest killers and unless Australia goes back to China like wages (almost slavery) then I just don't think the Mum and Dad's corner store can survive.

Looking back, here are shops/industries where they are now almost non existent:

1. Photoshops - digital cameras, printers and digital printing at places like HN killed it.
2. Computer Shops - Desktops out of fashion, laptops much cheaper. Only few players able to survive due to economies of scale. I use to know this fella in Footscray who made $200K profit p/a selling assembled PCs, maintenance, repairs and networking. Rented a 6x10m lil shop that costed $10K per year!
3. Video Shops - Rampant piracy (but slowly changing), cheap digital download alternatives (legal), other avenues like Oovie movies (low rent footprint, able to spread to many areas easily...).
4. Laundromats - Cheap Chinese & Korean whitegoods. Yes, there are still a few going around, but a huge decrease.
5. Pawnbrokers - Remember places like cash converters anyone? Killed off by cheap Chinese and Korean electronics, decrease in demand for second hand goods, ebay, gumtree etc.

 

[sanj]

5. Pawnbrokers - Remember places like cash converters anyone? Killed off by cheap Chinese and Korean electronics, decrease in demand for second hand goods, ebay, gumtree etc.

not so sure about this one

"Pawn broker Cash Converters has posted a record profit and expects a bright future, saying the federal government's new laws to cap pay day loans should give the company a “competitive advantage”.
Cash Converters today reported a 6.2 per cent increase in full-year profit to $29.4 million.


Read more: http://www.smh.com.au/business/earnings-season/pawn-pays-for-cash-converters-20120823-24npe.html#ixzz2DTpkiOn1"

 

[Andrew_A]

It's also can be nature of your job these days as well, dealing with clients who have jobs in both IT and mining/mining related industries you soon learn about job security and stability.

 

[charttv]

sounds like technology doing what it's always done. Disrupting industries, making certain types of work obsolete and creating new ones in the process.

Would anyone have considered a career in website design 20 years ago?

 

[turk]

Perhaps a case of Harvey Norman talking through his wallet

Slight case of the sniffles, but retail still healthy

Read more: http://www.theage.com.au/business/s...ill-healthy-20121121-29pmb.html#ixzz2DTuNAznQ

The history of Australian shopping is littered with the rise and fall of various brands. It matters to shareholders, employees and suppliers at the time, but not all that much to the nation. The caravan moves on.

 

[Rolf Latham]

sounds like technology doing what it's always done. Disrupting industries, making certain types of work obsolete and creating new ones in the process.

Would anyone have considered a career in website design 20 years ago?

I will keep selling Carbon paper

ta
rolf

 

[topcropper]

sounds like technology doing what it's always done. Disrupting industries, making certain types of work obsolete and creating new ones in the process.

Would anyone have considered a career in website design 20 years ago?

Thats exactly right.

What do retail workers add to an economy anyway? If the internet has made them redundent, then they are no longer needed to stand there and sell stuff. If people can buy retail items over the internet for cheaper, then that is what is going to happen.

It's a bit like agriculture. It once took 30% of the workforce to feed everyone 100 years ago. Now it just takes 2%. But this has been a good thing, not a bad thing as far as our standard of living goes. It means that now the other 98% of the workforce are employed doing other productive jobs, and this has lifted all our standards of living.

We are all living longer and having less kids. I can easily see that there needs to be more and more people employed in health services as we move on. Thats just one example of where these people who lose their retailing jobs will move to.


See ya's.

 

[Ausprop]

we should all pay more for milk so that the milkman gets his job back. and the baker. Sadly I am old enough to remember mum leaving the tin at the front door and coming home to open the lid and grab the fresh baked loaf. I vaguely recall the kids in the street running out to greet the old bloke.

let's ban the internet and mobile phones too. they take away too many jobs. think of the poor bank tellers.

 

[peastman]

I see an increase in small business opportunities.
During the 80's and 90's big business and major chains were making it nearly impossible for the little guy, but I feel the tables have turned and the little guy is doing ok. He can specialize and give better service than the majors and customers like that.
He can even compete with the big guys online.

 

[Truly Exotic]

I'd be happy to see Harvey Norman to go bankrupt before the close of 12 while things pick up for other retailers

 

[Aaron_C]

we should all pay more for milk so that the milkman gets his job back. and the baker. Sadly I am old enough to remember mum leaving the tin at the front door and coming home to open the lid and grab the fresh baked loaf. I vaguely recall the kids in the street running out to greet the old bloke.

let's ban the internet and mobile phones too. they take away too many jobs. think of the poor bank tellers.

Spot on Ausprop. Every change has winners and losers. Problem is that people always try to please everyone, when the economic reality is that someone has to lose for someone to gain.

 

[jim1964]

when the economic reality is that someone has to lose for someone to gain.

The sad reality of life.

 

[geoffw]

I agree that there are businesses which are dying. Video shops for sure. Bookshops and music shops have suffered as well, and will probably suffer more. I prefer to buy kindle edition books now, and would buy more music and video if my Internet line was rather much better.

But from a very small sample I don't see retail is going downhill fast. My Subway store in a Westfield continues to trade very well- I still see how it is going (I still have a financial interest). I see this as a reflection of retail in one corner of Canberra at least.

There's been a lot of press about how retail is suffering at the hands of the Internet. But retail still appears to be doing quite well.

 

[Rolf Latham]

There's been a lot of press about how retail is suffering at the hands of the Internet. But retail still appears to be doing quite well.

Segmented areas are getting hammered, but then in general I believe you are right because I see large LPT spending BILLIONS to refurb extend and aquire new upper market stock out there, so either

1. They will soon be Dinosaurs got they got it REALLY wrong
or

2. they will continue to do ok

ta
rolf

 

[weg]

I've seen a couple of great examples recently where the person/persons switched over from rapidly dying businesses, to getting into other areas where growth has been rapid they've needed to get family help or employ more staff.

In one case it was from old technology to the niche food market. The guy is struggling to keep up with demand (bought it as an established business for peanuts -liked the product- but the people who started it ran it down due to illness and lack of marketing).

I must say however I also know of businesses that have slowed right down and it's not 'out with the old' scenario; rather due to people spending less and/or changing the way they spend or what they spend it on.

 

[willister]

I see an increase in small business opportunities.
During the 80's and 90's big business and major chains were making it nearly impossible for the little guy, but I feel the tables have turned and the little guy is doing ok. He can specialize and give better service than the majors and customers like that.
He can even compete with the big guys online.

Almost forgot two more to my list:

7. Bookshops - ebooks, illegal downloads, e-retailers undercutting prices, even competition from external forces such as libraries, other forms of entertainment.

8. Milkbars/Smaller shop markets - gone are the days when I use to run down the shops to buy milk and bread for the folks, haven't recalled doing this since 1996....gone are brands like SSW, Franklins, Bi-Lo, all bought out by Coles/Safeway or just closed down.

 

[Aaron Sice]

The sad reality of life.

no it's the "sad" reality of the human mindset in a quasi-capitalist system.

life, left unchecked, would see our population dwindle to about 1bil planet wide and there would nothing to gain at all - much like communism, really.

we currently have a capitalist society with socialistic tendencies, like the dole and medicare. it's leaning towards providing enough incentive for an informed minority to exploit the system and never provide to the ever-expanding base that capitalism requires to survive.

key word there is "survival" - you're certainly not going to "flourish" as per the capitalist ideal.

therefore, you're going to get those who feel they could do better, but why bother when they're clearly better off than most.

it's like the "look in the mirror" syndrome. you're overweight - not by an immense amount and you could probably lose it if you wanted to, but there are so many people heavier than you, so you clearly don't "need" to, more "want" to; so it can wait until next year.

you enjoy a bottle a wine a night, and have done so for the past 15 years. but you still have a job, a good family, a nice car - you're not a street bum wine-o with a brown paper bag; in fact, no where near it - so i don't "need" to cut down......so i'll try next year...maybe.

this is the same mindset that "keeps people down" financially, or keeps alcoholics as alcoholics, or fat people fat. it's only when you look around the room and realise you're the poorest there, or the pseron with the biggest vice, or theperson that can't get on a flight for their honeymoon that the process of realisation hits home.

then you move into that 7 stages of recovery.

so after that nice long waffle....as someone running a small business - could you be more effective? you're not in any danger of closing at the minute, so becoming more efficient is more of a luxury now than a "need", so i'm sure you can look at after you've sorted out BAS and the christmas orders.....

 

[charttv]

He can even compete with the big guys online.

Not 100% sure about that peastman. Online retail tends to be dominated by a handful of major US players who mostly compete on price.

If you have something incredibly niche and unique then maybe but if you are selling something generic like electronics or books it can be incredibly difficult to compete with the big boys.

 

[Aaron Sice]

http://www.ted.com/talks/ernesto_sirolli_want_to_help_someone_shut_up_and_listen.html

 

[TrainTrax]

http://www.ted.com/talks/ernesto_sirolli_want_to_help_someone_shut_up_and_listen.html

Thanks Aaron, that was an excellent presentation ... if not a little sobering.

Cant actually remember where I read or heard it over the last few days (probably somewhere on Somersoft!) ... but something to the effect that even though there will be a huge amount of online business in the future, people will still value convenience ... so will still be a huge demand for local small business to provide various services.

The million dollar question is what specific businesses.