For today's retail business, nothing new under the sun

Ecclesiastes 1:9 (NIV) What has been will be again, what has been done will be done again; there is nothing new under the sun.

This has always been for me a very interesting quote from the Bible. What does it have to do with retail, you ask? Retail was forever a service business, not a product business. A change occurred somewhere shortly after WWII with the huge economic boom that followed and the commoditization of retail in the form of lower product prices over service. Everyone can now be "rich"! At least that was the dream.

The switch from service to product was subtle and took a number of years to fully catch on. It was a race for who could get big enough to control product price. In retail the focus until late has always been about operational optimization in the form of product costs vs. price sold. Nothing about customers or service was the focus because the value proposition was the lowest price. Hence, companies like Wal-Mart grew to be gigantic and the good old great service companies I remember like Sears became a shadow of what they once were or vanished altogether. The problem is that most companies followed this model, which they were in many ways forced to, and found themselves in a death spiral. We know who they are - JC Penney, Sears, Kmart, Montgomery Wards, Circuit City, Borders and soon to be Barnes and Noble for example.

Barnes and Noble is a very interesting study. They did it all you might say: online, in store experience (remember Starbucks), customer service/brand loyalty and even gadgets like Nook! One word, explains their struggle: Amazon. It took 10 years or so, but with the advent of electronic ...