#TBT: The Irrelevance of Stores and How That Affects Live Entertainment (Hint: It’s a Good Thing)
Happy #TBT. In light of the recent news about Macy’s, Sears and The Limited closing stores in 2017, we’re sharing this May 15, 2014 post from Jim: The Irrelevance of Stores and How That Affects Live Entertainment (Hint: It’s a Good Thing).
My 16-year-old shared an important macroeconomic insight on a megatrend that will play out in our economy over the next several decades.
We were walking through Bed, Bath and Beyond (don’t ask), and he said, “Why do they even have stores?”
He didn’t mean Bed, Bath and Beyond (whose stores are pretty fun, actually.) He meant “they” the way that all teenagers mean “they.” He meant “the adults” or “society.”
Why do they even have stores?
From his point of view, as a leading-edge kid from Southern California in the early days of the 21st century, stores are pretty irrelevant. If he wants something that he can’t download, he can usually find it and buy it online in a few seconds.
Still, he’s not necessarily typical. For him, groceries just appear in our kitchen. He couldn’t really care less about clothes. And he’s in a leading-edge kind of community in a major metropolitan area. And online retail is still just 6.4% of total retail in the country.
But that number used to be zero, then 1, then 2, then 3 … you get the picture. It’s only got one way to go. This is a trend that hinges, to his point, on one question: “Why should we gather a bunch of things, put them in one physical location and ask people to come buy them?”
When retail locations close these days, they are replaced more and more by either, sadly, vacancies, or by businesses that are experience-based in some way. A former Blockbuster video location near me recently turned into a dentist’s office. Restaurants and cafes take the place of knick-knack and candle-type shops every day.
Where we’re going is very simple: We need fewer and fewer stores for retail goods, but we’ll either replace those with empty spaces, with residences or offices, or with experience-driven businesses.
There’s still a good answer to the question, “Why do they even have live entertainment and arts venues?” Because that’s where the show happens and the show gives people a great experience they can’t get at home.
Live entertainment should benefit from the gradual collapse of much of offline retail. A shift away from a goods-based physical commercial environment toward an experience-based one works well for our industry.
But don’t get cocky. People could stay home altogether. Make it matter that they came. Make it important that they be there live.
Make it inconceivable that a teenager not understand why there should even be live entertainment venues!