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Edited on Wed Nov-17-04 02:54 PM by Surikat
...are currently very competitive for the consumer dollar. They're competitive because they are able to work with producers to reduce costs in ways that fragmented, specialty stores are not.
Big boxes are not a new business model. They current fill the same economic niche that outfits like Sears-Roebuck and Spiegels did half a century ago. The anger that small businesses feel for big box stores is nothing compared to the loathing that small businesses felt for outfits like Sears-Roebuck when they leveraged the railroad shipping capability and the post office in the late 19th century to revolutionize consumer access to inexpensive, well-made merchandise via catalog sales.
I tend to use Costco, for example, because among other things they market under their Kirkland label what is, as best as I can see, is the cleanest and least likely to spoil milk I can buy anywhere.
Recently, however, I've seen my purchases at Costco drop by about 75-80% simply because they have no product loyalty. They will stock something that I like for a while and then after a few months I will no longer be able to get either that item or a reasonable alternative. Wal-Mart is a bit smarter about developing long-term supplier relationships than Costco is, however.
The point to all this is that big box stores are currently economically viable. Smaller stores keeping older paradigms of marketing aren't.
I frankly don't see big boxes keeping their market share for too many more years, however. The paradigm I see succeeding them can be found in Amazon's used book service. The ability to access virtually any book shop's inventory via the Amazon search engine has turned what was a marginal industry (used bookshops) into a vibrant, exciting business these days. Mind, the shops' walk-in custom is very small, but the amount of inventory they ship via UPS and the Postal Service is huge.
Small businesses that are smart enough to specialize and really get to know their product lines that adopt that world-market sales paradigm by partnering with an internet consumer search service like Amazon has will do well. The others will be dead meat.
A free market is like that. Trying to stop that sort of shakeout is simply taxing consumers indirectly with higher prices to preserve outmoded business models. Mind, there is a lot of that trying to happen.
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