As consumption trends shift, there are always winners and losers. When people stopped wearing formal hats, most hatteries and milliners went out of business, for example. We might similarly predict some likely closures, based on recent trends. But some of these predictions might be premature, or inaccurate, in ringing the death knell for an entire industry of retailers.

Consider tobacco shops as an example. Their long-term survival comes more and more into question as smoking rates decrease. However, the decreases in smoking rates are occurring simultaneously with decisions by drug stores, such as CVS, to stop selling tobacco. Thus for small, independent shops, the trends might turn out to be a boon. In the smaller market, they will be the only ones left selling cigarettes, and they can also leverage their market to sell more e-cigarettes and other innovations to consumers who insist on their right to smoke.

Similarly, independent record stores and book stores, if they can hang on to survive the shakeout of their industries, might be well positioned to succeed in the long run. As major chains in both sectors have closed down, local stores can appeal to fans who still love the sound of vinyl or appreciate the recommendations of the neighborhood bookseller. For these retailers, the movement to encourage people to “shop local” also provides a strong form of support. They can help consumers feel more virtuous, just by remaining open and helping shoppers justify their purchases as a tactic to support their local economy.

As these examples suggest, it can be tempting to rely on trends to predict survival rates, but it also can be inaccurate. When people’s tastes change, some retailers will go out of business. But if a seller of a particular product can adjust and appeal to buyers’ nostalgia, sense of identity, or moral drives, it might find itself in an even better position than it was when its products were more widely popular.

Discussion Question:

What types of retailers do you believe will go extinct in the next five years or so?

 

Source:  Daphne Howland, Retail Dive, October 13, 2014