A Closed Mind Killed the Retail Star

I’m on the plane flying back to New Zealand and I’m astonished how quickly things have changed since I was last in the US. This trip I visited LA, Las Vegas and San Francisco and I was overwhelmed by the change that I witnessed in 12 short months.

This morning following my memory map I headed towards the large  CompuServe electronics store in downtown San Francisco where my wife and I brought a digital camera in 2006.

Homing in on the spot I was disappointed to see it had turned into yet another clothing store.

Further up the road I noticed the “for lease” sign out front of the big Virgin Megastore.

Across the street from the virgin store you can enter one of the busiest stores in San Francisco – The Apple Store - where half of the store is dedicated to sell two products, the iPhone & the iPod touch.

Apple is thriving in retail and I’m not surprised as it was the only recognizable electronics store that I saw in both LA and San Francisco. Las Vegas didn’t fare much better where I’ll go as far as saying that the Apple and Sony stores in Cesar’s Palace may very well be the only electronics stores left on the strip.

The “Electronics & Entertainment” section of the information boards in America’s city malls are shrinking to only a handful of shops. More than half of which are Telco's pimping their mobile wares.

The realization of what is happening is so obvious from the outside looking in. It’s like when you’ve been away a while and you come back and someone you know has grown taller or put on weight.

Now we’ve all heard the story; illegal downloading of music and movies is causing the countless loses in big media companies earnings and it is the artists that are suffering.

Well after this trip to the US I think there are much larger forces at play here and this time you can’t blame the kids.

Electronic and Entertainment goods are no longer available to tourists in the United States of America and bit torrent has nothing to do with it!

So why do I make such a bold statement?

Observations:

1. Amazon rules the market for Americans wanting to buy toys, consumer electronics, books and DVDs. With next day shipping, the largest catalog and competitive pricing a whole category of purchases in the US have moved online.
2. Groupon, ebay daily deals are consolidating buying power and making people buy things they don’t need or want because they believe that they are getting quality goods and services for bargain prices.
3. To compete chain stores have consolidated and gone big, moving out of the city to the suburbs to try and compete with the buying power and extensive online catalog of Amazon. Best Buys, Fry's, Wall mart to name a few.
4. The stores that are left in the cities are no name outlets that try to be everything to all people. They sell a few CDs/DVDs, they stock a few cameras, some music players, headphones with a kiosk to “load up” your portable device with digital music. This is all done at premium prices with little consumer choice.

There is hardly anyone left selling electronics to tourists in the most heavily populated tourist destinations in the United States.

Best Buy have noticed this and have gone a little way to cash in on the opportunity by taking some of their “more popular” products (iPod touch, flip, digital camera etc) and placed them in vending machines at busy public places like airports and train stations.

That said I have never, in all my trips to the US seen someone swipe their credit card in one of these vending machines and buy anything.

So what I thought I’d do is offer Amazon (or one of their competitors) a free idea.

Sell in American to people who visit America!

How could this work?

Well the same way duty free stores work today, you choose what you want before you travel or while you are away.

Order online before you leave your home country, pay and then pick up your goods from the “Amazon Shop” in the city or at the airport when you arrive or leave on your flight.

Yeah I know you can get goods shipped from Amazon to your hotel today but I don’t trust it because there is no certainty that they will arrive while you are there or that they will be safe after they are delivered to the front desk of the hotel.

Back this up with “Amazon” kiosks at key tourist spots that allow people to browse the full Amazon catalog and purchase items to pick up in couple of days from the Amazon shop or when you leave the country.

Personally I don’t mind leaving America with my money still in my wallet but it seems crazy to me that America has become so obsessed with serving it’s citizens that it has chosen to ignore all the tourists that arrive looking to buy things that can no longer be found in the city stores.