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The rise and fall of super specialty large stores: what went wrong for retail giants?

  

The downfall of super specialty stores also termed as category killers has been a topic of discussion in recent years, and the recent bankruptcy of Bed Bath & Beyond and the closure of several of its stores have brought the issue to the forefront once again.

Category killers like Bed Bath & Beyond, Toys 'R' Us, and RadioShack, once considered the epitome of specialty retail, have fallen from grace due to the changing market dynamics and the emergence of online shopping.

These retailers' business models relied on offering a massive selection of products, every variation of what a shopper wanted in one location, and at lower prices than non-specialty stores. They nearly created monopolies in their respective product categories and typically had stores sized at 50,000 square feet, positioning them to be larger than independent store competitors but smaller than megastores like Walmart Supercenters.

According to experts, category killers' ultimate downfall was due to the rapid change in technology from the 1980s onward. The emergence of global supply chains, cheap container shipping overseas, falling telecommunications costs, and computers made it possible for companies to buy at high volume for less money and sell at lower prices. This led to specialized retail giants buying improved technology to place in their stores to set themselves apart from local shops.

However, with the rise of e-commerce, Amazon has effectively taken away the category killers' main advantage of offering more product choices and variability through its website. Walmart and Target can also survive by specifically focusing on products in high demand.

While other category killers like Dick's Sporting Goods, The Home Depot, Lowe's, and Best Buy are still hanging on, it is feared that shoppers will ultimately regret the downfall of category killers.

 
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