The grueling change facing big box stores

It is with heavy hearts that many of us watch the grueling, gradual decline of some very valued, U.S. big-box retailers as they pull out of shopping malls and close stores.

The latest victim: The Macy’s store at Lycoming Mall to close early this year.

Happily, the local Kmart store along Hogan Boulevard survived the company’s most recent wave of closings.

But how long can this store survive these ongoing cuts?

What’s our economy coming to?

The internet rules, like it or not.

Sears, perhaps the most iconic retailer in American history next to Macy’s, is becoming a shadow of its former self.

Amid continued store closings after having taken over the struggling Kmart chain, now, sadly, Sears Holdings Inc. has divisted itself of one probably it’s more important and best-branded products: Craftsmen tools.

This trend isn’t about to stop.

Slowly, holiday shopping is being replaced by a computer as the wonderful experience of browsing in a department store on local retailer to find that special gift diminishes.

“Experts” say big box retail stores are losing relevance, while e-commerce and specialty stores grow in appeal.

“People no longer want — or need — to shop as anonymous customers in large stores with shelves stocked high in aisle after aisle,” writes Denise Lee Yohn in the Harvard Business Review. “As a result, big box retail must shift its strategy — from competing on access and selection to staging big experiences and providing big discounts.”

Truth is, she adds, the shrinking demand for big box retail can be seen in the numerous store and company closures across several categories over the last decade.

Circuit City. Sports Authority. Borders.

Office Depot/Office Max just announced it would close 400 stores this year and attempt a merger with Staples.

While Barnes & Nobles, Kohl’s and Old Navy fight on to stablize, those and other large-store format companies are losing share to Amazon and other e-commerce sellers and to specialty retailers, Yohn says.

Yohn says several dynamics are producing the trend of diminishing retail stores:

1. The U.S. is over-retailed. There are close to 50 square feet of retail space per person in this country compared to 2.5 in Europe, according to The Robin Report. Over the last decade, retailers, motivated by the pursuit of growth traditionally measured in square footage, over-expanded even as consumer demand was moving online.

2. Consumers are spending less on goods and more on experiences. Last holiday season, PwC reported that Millennials were spending a larger proportion on travel and entertainment than were their older counterparts. But the shift is not happening solely with younger shoppers. Mintel’s 2015 American Lifestyles report projects that vacations, dining out, and other experiential categories will drive the growth in total consumer spending.

3. Personalization is expected. The use of technology by leading companies from Apple to Uber to personalize their offerings have raised people’s expectations. Customers no longer want anything that is mass-marketed. PwC has observed that niche products, experiences, and services uniquely suited to individual tastes, interests, and aspirations have become “the new consumer indulgence.”

Yohn says all this adds up to “people placing less value on having access to a wide selection — the very advantage that big box stores used to leverage.”

“If big box retailers want to avoid becoming ghost-boxes,” she writes in a recent story found online at, “they need to change their value proposition. They need to leverage their scale to offer what ‘e-tailers’ and specialty players can’t — big experiences, big discounts, or both.”

And so here we are … we Americans so proud of “Made in America,” yet left to buy so many products that are made overseas and now more and more seeing our beloved brick-and-mortar stores go away.

It’s the new world of retailing, like it or not.