Hearne: Will the World Wide Web End Retail As We Have Known It?

A moment of silence please for the dearly departed…

Including Circuit City, Movie Gallery Borders Books and Ultimate Electronics.

And now with Best Buy and Blockbuster, on the ropes, newspapers and magazines hanging on for dear life, it’s clear when it comes to the ravages of the World Wide Web, nothing is sacred. Raising the question of if we’re entering an era where local retail will be limited to a handful of specialty store survivors.

"If you had any doubts that nowadays people prefer to shop electronics online, the latest earnings report from Best Buy should make you a believer," CNN Money said last month. "The nation’s largest electronics ‘brick and mortar’ retailer announced a 30% decline in its net income for the second quarter. Same store sales slid 2.8%"

The flip side of that toe stubbing:

"Meanwhile, Amazon, which has become an e-tailing powerhouse, continues to grow revenues," CNN added."Its shares are less than 5% from an all-time high level and up almost 50% for the past 12 months."

Kansas City audio / video retailers have been dropping like flies for years. Can even the once mighty Best Buy survive?

"Best Buy is without a doubt the dominant audio/video chain in America," says John Kiefer, owner of a/v retailer Kief’s in Lawrence.

Kiefer stopped short of forecasting Best Buy’s demise, saying only, "My personal opinion is they’re less than they were a year ago."

CNN reader/commenter Jeffrey Nagy offered a far less generous take .

"Best Buy is seeing what every retailer with an online counterpart will inevitably have to deal with," Nagy wrote. "The only retailers spared are the ones that sell products that have to be so exacting to the individual that purchasing online creates too many variables… like clothing."

Part of Best Buy’s problem – believe it or not – is the death of its chief competitor Circuit City, Kiefer says.

"When they had Circuit City they had competition and you need competition to keep you sharp," Kiefer says. "And they don’t have that right now – they’re just a store."

Will local audio retailers even exist in the years to come?

"What I think is simply this," Kiefer says. "Our industry has changed from an audio industry to stores selling small, miniature ipods, iphones and ipads. You know, a way to get stuff where you don’t even have to think about it. We’re not seeing customers who want music. What they want is noise. What I’m saying is today’s consumers by and large seem to be shopping for a lot of features and tech stuff. They’re not looking as much for true audio."

Which has effectively transmuted what’s remains of the electronics retailing industry, Kiefer says.

"All of the box stores today are loaded with a lot of gadgets and you don’t see a lot of audio," Kiefer says. "You don’t see a lot of audio and what audio you do see is entry level audio. You do see a lot of TVs."

Bypassing local retailers and purchasing electronics online was shortsighted because, "Specialty stores have always been the most honest stores in my opinion," Kiefer says. "But when consumers went online to save a few bucks, the specialty stores went out of business. Now the two main places you can buy audio and video gear, the box stores and online are the highest priced places left.

"Today old line stores – guys like me who have been there for 50 years – are all that’s left. Who’s got enough money to open a specialty store today? So what you’re seeing is the Nebraska Furniture Marts which are extremely large, but they can’t tell you much about the products."

Meaning?

 "What’ll happen is if the only thing you can walk in a store and see are mediocre products, then mediocre is gonna be thought of as good," Kiefer says. "What consumers are doing is trading quality of sound for quantity of music that is portable. They don’t know any better. You know, if KU was the best football team you ever got to see, then people would think of KU as the national champions. That KU must be the best."

The bottom line:

"I think  technology is telling the customer, I want it easy, fast and cheap. Add those up and who’s going to stay in business?"

So how long can smaller specialty retailers like Kief’s survive?

"I would argue that in the future a store like Kiefs – provided I want to stay in it or somebody like me does – can survive," Kiefer says. "But you may have to go 250 miles to find a real store. I don’t think it’s going to be bad forever. And we’ll be one of the ones left. I think so – I do think so.

"What I believe without a doubt is the industry will have to evolve kind of like the car business, except the government isn’t going to help us. There were way too many cars out there. So what we need to see, for the audio business to get good again, is about half of the choices of products and half as many choices of places that sell them."

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31 Responses to Hearne: Will the World Wide Web End Retail As We Have Known It?

  1. Super Dave says:

    It’s A matter Of time
    All the computers I have bought in the last say 9 years or more not kept track but all have been ordered from the desk I sit at and shipped to an address. In fact as I write this I sort of look around and see many things I have ordered from on-line stores or suppliers.

    When one is offered free shipping and prices lower than the stores in the area it’s down to a matter of do you want it right now or is in two days ok. As a rule the wait is worth the reward. To be honest my on-line shopping has had less issues as in non working items than when I was going and buying at a retail outlet. With the price of gas what it is yes it is cheaper to shop on-line

    But rather I buy on-line or from a retail location I do all my research on-line and locate the item on-line before leaving to do a hands on of the item. I don’t order things such as shoes or clothing on-line outside of say t-shirts due to my funny nature of picking out the styles I want to wear. I am still a very wanna go to the stores for those items.

    So yes for many items the world wide web is good for buying things and for many other things it isn’t.

  2. Craig Glazer says:

    My Point Exactly
    Everyone wants to embrace the social networks, the online lifestyle. It more than anything else I believe has put us in brokeville. No jobs, no income from media much anymore. We aren’t far from a time when there are no TV/Movies stars at all, just a job for people who want to be on the net…its not good. No more books, wow. No newspapers. Look I am told you have to move to the future on this issue, I don’t see that its helping things, the speed of mostly useless info. does not outweigh peoples right to be different or show their talent…and get paid for it, that is quickly going away. So very sad.

  3. smartman says:

    Duh, Bigger Issue
    The internet has created an incredibly robust and viable market for used/second hand goods. Whether it be cars, tools, luxe audio, books, etc. Our ability to liquidate our STUFF is greater now than ever before. Craig’s List, EBay and a host of specialty marketers allow you to buy and sell used items with a high level of confidence.

    So while you might not be able to afford a $3000.00 set of speakers at Keif’s you might find them used online for $1000.00 and be able to purchase them with a satisfaction guarantee.

    The strong will always find ways to adapt, create value in new ways and survive. As consumers the internet has provided more access to more products than ever before. That’s the beauty of capitalism. That’s POWER to and for the PEOPLE.

  4. Ted chuck Kaczynski says:

    Fuckin bullshit
    I am blowin this site up.

    Right after I gete some more cool aviator glasses. I lost those fuckers, but I should be able to land them on Crag’s List, then, ITS YOUR ASSES!!!

    Oh, shit, thats right, I gotta stop wearing this hoodie. Fuckin Bill Belichick has one, and he is stealin my thunder. I gotta get a new look. There must be a Luddite site on the web, that will show me what is comme il faut underground bomb makin de riguer.

    Did I blow up Time Warner? No, thats next week.

    Man, I have REALLY got cabin fever!!!

    Think I will blow some shit up in Italy.

    I’ll call Jack Poessiger and book a fuckin trip.

    Yeah, and I’ll see a movie too, after I check Yahoo for times.

    Then I’ll blow up Shelton Travel.

    They are drunk all the time down there anyway.

    I’m thirsty.

    There is no fridge in this fuckin cabin.

    Maybe I will look on line and…

  5. Mark X says:

    Yes…
    Best Buy is just the showroom for Amazon …

    I always check out the product there … then go home & purchase via Amazon.

    thank you, best buy

  6. smartman says:

    @chuck+ted
    C’mon dude, you anarchists are havin’ a pretty good week. Amanda Knox got off and Frances Piven is marching on Wall Street with her disgruntled minions. Market is in the shitter, half-black man still in the White House. Cantalope’s are killing innocent people and Hank Jr. compared Obama to Hitler and Sobbin’ John to Bebe Netanyahu and got tossed off MNF last night. What more to you want?

  7. Hearne Christopher says:

    So only the place people HAVE to shop at in person are to survive? What’s to become of all of the rest of the infrastructure we’ve built up and the jobs that accompanied it?

  8. Hearne Christopher says:

    Agree but where are the, you know, jobs?

  9. Merle Tagladucci says:

    Reply From: Hearne Christopher
    10:38:20 AM – Tue. Oct 4. 2011

    Agree but where are the, you know, jobs?

    **********************************************************************************************************************************************

    When are people going to stop expecting jobs to fall out of the sky? You better sharpen up your carpentry skills and buy a new tool belt because the Job Fairy isn’t coming. Companies aren’t expanding, they’re downsizing. Small businesses aren’t starting up, they’re closing shop. Half the crap in your house was made in China or India. The American worker’s value isn’t worth jack squat these days, and if you want to increase your self worth you might want to expand your skill set instead of waiting around for politicians and elected officials to snap their fingers or sign a bill that magically creates work for everyone. This country isn’t going to fix itself. People are so used to pushing a button to get their tv channel to change or their microwave burrito to cook in 60 seconds, they think everything else should be that easy. Find work where you can….it’s not going to come looking for you.

  10. smartman says:

    Wey Duh Jobzes?
    The jobs have all gone to nations and people that can do it bigger, better, faster, louder and cheaper. Union movement fucked the whole thing up. $50.00 an hour to do a repetitive task on an assembly line with benefits and a pention does not compute any more.

    It’s a GLOBAL economy and if you can’t create or add real value you are fucked, with or without a degree.

    I see the value in Mr. Keifer’s opinion on luxe audio and am willing to pay a premium for it. Some 17 year old d-bag at Best Buy, not so much. Now if I was a gamer that scenario might be reversed.

    If a 13 year old in Thailand or a robot in Detroit can do you your job better and cheaper, guess what YOU LOSE! That’s life!

    The unemployment rate among college grads is 4.5%. The unemployment rate among black males without a high school diploma or GED is 19%. What’s that tell you? STUPID FUCKERS are no longer necessary to keep the wheels of progress moving forward. We just need them to bag it up and push it to the car. But you can’t do that when you need one hand to hold up your pants and another to talk on your Android with the BOYEEEEZ!

    That half a billion dollars that half black Barry wasted on Solyndra could have created a shitpile of REAL jobs. But NO! Mr Chu and Half Black Barry needed to serve their cracker masters.

    In time the rest of the world will get lazy and greedy like we did and fuck up a good thing. They’ll start labor unions and want benefits and pensions, a complete cradle to grave tit-sucking existential existence.

    Until that happens, Ken and Barbie better hold on cause it’s gonna be a rough ride.

    God+Gold+Guns+Glazer will get you through.

  11. Rick says:

    Not sure I agree
    If customers are not looking for quality how does that explain Bose?

  12. smartman says:

    @Rick re Bose
    I will never forget what Bobby Alcanter, the manager at the CMC Stereo on State Ave in KCK told me about Bose speakers back in 1976. “Ten transistor radios are better than one”

  13. Rainbow Man says:

    Glazer
    You send a kid to a community college for two years to study computer science. You also send a kid to KU to puke on himself for four of five years and get a general business degree. The community college kid will be making six figures long before the KU kid. But parents don’t want anyone at the club to know their kid goes to a community college.

    Glazer is partially right. Technology is a burden on our economy because we have become huge consumers of all of this stuff, but too few have jobs related to the technology itself. That is because we are lazy…. We just want it to “work” and let someone else worry about maintaining it.

  14. chuck says:

    Rick-Smartman
    Used to sell “Dierect Reflecting” Bose 901s back in the day. What a fuckin hoot. Dr. Bose, who must be the greatest snake oil AV guy in fuckin history, has 8 or 9 drivers, all the same size, no fuckin crossovers, and then, what does the man do, he tells ya to put them up high, and face them to the wall, so the sound will (And Jesus did they have diagrams for this shit, out the ass, POP like a MF!!) “direct, reflect” off of the back of the wall, and the side of the wall, and shoot out to the center of the room.

    That fuckin guy is the GOD of salesmen.

    People ate that shit up with a spoon. I was no audiophile, so I just sold what they told me to sell, but after a while, I’m thinkin. What the fuck??”

    The shit just rolled out the fuckin door.

    Years later, the man comes up with a fuckin $500.00 clock radio!!! Dude could seriously market Ice machines to Eskimos.

    Back in the 80s, I had to go to Framingham Mass. to the Bose factory.

    I am not shittin ya, the whole place was filled with Stepford Wife/Employees who constantly wanted to know if I had “Met Dr. Bose yet.” He was outta town, so I didn’t, but EVEY employee there, was enraptured with the man.

    It was fuckin weird.

    We used to have a joke, we would all hold our hands, dirctly in front of our mouths, and say, “No highs, no lows, must be Bose.”

    If you were an AV guy, you liked that joke.

    🙂

  15. smartman says:

    @chuck
    I had some Bose 901’s. I used them as midrange speakers in an active 3 Way System I built. Had front mounted JBL 15″ for the lows and.Heil Air Motion Trsansformers for the highs. Triamped with Crown DCA 300-150-60 amps. Looked gnarley but it sounded sweet!

  16. chuckc says:

    you could weld with Crown DC300s
    Ya gotta have to MASSIVE capacitors!

    Head room!

    Heh, heh…Bose 901s for midrange….. 🙂

  17. Rick says:

    Thanks Chuck
    for your insight

  18. Hearne Christopher says:

    Hate to say it, but to audiophiles, Bose is pretty mediocre. Decent sound, great marketing but far from anywhere near high end. I’m talking primarily about their speakers.

    Bose’s success is based largely on branding. And like Kiefer said, people not knowing any better.

    KU football rules!

  19. Hearne Christopher says:

    I’m an AV guy

  20. Hearne says:

    Now here’s my confession…
    My new Fiat comes with a Bose system. And it’s actually somewhat kickass…

    In spite of the fact that it’s a Bose system. Car system.

  21. Super Dave says:

    WHo is to blame?
    Reply From: Hearne Christopher
    10:36:33 AM – Tue. Oct 4. 2011

    So only the place people HAVE to shop at in person are to survive? What’s to become of all of the rest of the infrastructure we’ve built up and the jobs that accompanied it?

    **********************************************************************

    What jobs? You mean the jobs in stores being held by people who could care less if you shop there? Or the store where the person comes up to you and asks to help you but has no clue about the items in their dept or what they are all used for. The same stores who on the phone tell you they have it in stock but when you get to the store they are sold out but happy to sell you a higher priced unit that is in stock.

    By shopping on line it is where I get the information and specs I want for the items I seek. Very few stores anymore work on customer service. I remember in years gone by when you could go to the local hardware store with an item and say I need this and a person in there would look at it turn around walk to an aisle move a box or two and handed you what you wanted. If they didn’t on one of those rare times they did not have what you wanted they would say come back in a week and we will have it and they did. Now days if it is not hanging in a package on a hook they don’t have it and so you go home look it up on line and order it yourself. You can’t as a rule order it in the store because they can’t find a book no one knows how to order so they take your name and somebody might call or will call and say they can’t get anymore after you have ordered it yourself two days ago on-line.

    The Home Depots and Lowes for one that so many like have come to town and ran off the entire customer serviced based places we had for covering those items. Some like to say it’s cheaper this way well guess what it is not. It is cheaper crap is all. Big business has killed customer service and changed how many people shop. It is not us the consumer to blame for the changing shopping habits.

    Unlike some beliefs entertainment is still here and good books flying off the shelves all the time. The local library down the street busy all the time hell even I read a lot have my own bookshelves full of books and buy more every month. I don’t have a new state of the art reading tablet I prefer to relax with a real book. But either way reading will be around for a long time to come. New movies out all the time and the cable channels have some really great series running on them. Actors are working and support people for these shows working to make it all happen.

    So the jobs you ask about say like yourself did we the readers in KC put you out of a job or did the higher ups at the Star kill the paper. If you ask me was not we the consumer that killed the Star bad writing and poor business operations killed the readers and the advertising clients of the Star. I would be more than happy to get the Star everyday if it had something worth reading. But long time ago it started not to and that was sometime before the internet was that popular for getting your news stories. So can’t blame that one on the World Wide Web. Can’t blame crappy customer service on the World Wide Web either.

    As smartman points out GREED is what has changed a lot of how America does business today.

  22. Hearne Christopher says:

    I won’t argue most of your points…

    I guess what I’m wondering is will we return in effect to the Stone Age. Living in our “man caves,” only venturing out to pick up groceries and stuff we cannot comfortably buy online.

    I mean, really…

    If all of us go to retailers like Best Buy, check out the gear, then buy it online for a few bucks less, obviously Best Buy isn’t gonna be around very long.

    I suppose the same could be true even for things like clothing. We go to Hobbs or Standard, try on the Ben Sherman, then snatch it up for less at Amazon.

    Where does it end?

    And smartman, don’t think there won’t be a domino effect even tho you may feel insulated for now

  23. Super Dave says:

    Is Our buying habits in some way that new?
    Today I went to Best Buy, in fact was at two stores after being told they had the two monitors I was seeking. They didn’t have either one. So I was left to order them from Best Buy on-line. So Best Buy didn’t lose per say since my client wanted a certain brand monitor but I ended up charging my client more labor for running around on a wild goose chance that could have been avoided in the first place by good customer service.

    Now I don’t got to a clothing store try on and then come home and order I buy where I am at.

    I use to like dealing with local merchants but not anymore. The days where you knew everyone in the store or least most of them is gone.

    I would like to semi go back to the old ways of buying things but we the consumer are not to blame for that not happening any more.

    All Amazon is doing is being very sucessful at doing what Wards, Sears J.C. Penny, Spiegels, Fingerhut, Swiss Colony and to name many others have been doing for 100 years or more maybe. Some of those places been around forever and one is no longer. They just do it via the internet now rather than via the USPS or phone ordering. So in short your grandparents probably was doing the same thing way back in the good old days they just went about it another way.

    So a lot of our buying habits in short are going back to the way it was many years ago just doing it a different way.

  24. bschloz says:

    AMZN
    Denniger wrote a great article on how AMZN is going to 0.
    He believes when the States finally demand tax on the sale that it will destroy their pricing structure.
    Personally I think Best Buy is a decent experience— friendly credit ..no rebates to mess with.
    They make big money….but their stock being destroyed–maybe victim of the Real Estate vortex.

    Hearne whats up with our Sprint? They are about to get in a race with MNI to 0. Put Glaze on it!

  25. Rick says:

    Hearne u confirmed
    my point. If people aren’t looking for quality then explain Bose. And you say it comes in your new Fiat and it kicks butt.

  26. Tech-Now-Logy says:

    Tech hasn’t killed business
    I have to disagree. Tech hasn’t killed business. It has certainly changed where we purchase certain items and how we research various products. If tech has killed busines why would Apple open retail stores? Why would there be retail outlets for cell phones and other electronics. If anything it has changed how companies should do business. Best Buy has an online presence but ultimately it pales in comparison to its competitors online presence. As for technology costing jobs it’s an evolutionary change that many refuse to acknowledge all these sites, need administrators, programmers, even maintenance people, electricians, and the infrastructure that makes up our internet requires a skilled workforce. The key to that being “skilled” and this is where the breakdown has occurred. Starting with the failure of government and citizens alike to embrace a change in how our kids learn for a modern technological world. An educationaly system still stuck in the days of agricultural, manufacturing and parents more interested in highschool sports then if their kid can use a computer with any degree of expertise outside of facebook

  27. Super Dave says:

    Another Well Made Point
    Tech Now Logy you are very right but sadly some not been around the World Wide Web as you and I so they don’t see that side of it.

  28. Hearne Christopher says:

    I’ll say this for you, you don’t give up easy. You cite Bose as a quality product, then agree that it’s mainly hype after reading informed opinions, then claim it still makes your point.

    Am I missing something?

    The fact that Bose is – not so much inferior, but over hyped – I suppose does support that people are looking for quality. Also that they can be deceived.

    It does come in my new Fiat and it’s above average. Well above average. But I’m comparing it to factory sound systems which have a very low bar. It’s also a lot easier to dial in quality sound in the small confines of a car.

    Now would I go out and buy or recommend someone buying a Bose car system? No.

    Unless it came as the factory upgrade and integrated with the blue tooth and on board computer. That’s really the driving force. The days of popping in new audio systems that don’t synch with your nav, blue tooth, etc. are fading. Car stereo joints have been dropping like flies for years.

    It’s just an expensive hassle to gut your sound system and then make it all work together like the factory ones. The factory upgrades, I mean.

    The Fiat Bose system is minimalist and built to hit a price point. It will sound good to the average ear but I doubt anyone will be racing over to show it off to their audiophile friends. The Prius JBL factory upgrade is far superior.

  29. Hearne Christopher says:

    Make no mistake, tech has killed business. It’s also CREATED businesses. The question is,how much of each? Right now the empirical evidence strongly suggests it’s killed more than its created.

    We’ll see in the long run.

    I was talking about local retail in this story.

    If everybody buys on Amazon – even after shopping Best Buy, etc. – Best Buy’s not gonna hang around and lose money. Just like the dozen or more area /V stores that have closed in recent years.

  30. Hearne Christopher says:

    I’ve been all over the World Wide Web from the get-go.

    My story has nothing to do with the positive contributions of the Web; those are obvious.

    But to ignore the toll it has taken and continues to take is naive

  31. Rick says:

    As the norm
    u misquote me. I didn’t say I agreed it was just hype. I just said thanks for the insight. The you try to portray I have conflicting view points. Quite a stretch.

    All that being said. I now see your point.

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