Quote:
Originally Posted by rcentros
If you say so. I think it's telling that one of the high growth sectors in business is for dollar stores and pay-day loans. Catering to the high-end may have a short shelf life.
|
Yes. And what's wrong with that?
Again: I said ramp-up.
Short term.
The whole point is that building a chain of B&M stores is expensive and at this point in time, risky. So you *start* in high-probability locations targeting those affluent enough to buy your products.
That is for today.
Tomorrow they'll do what makes sense then.
In the meantime they are using modern technology and modern processes to move product.
Instead of dated old-school approaches.
When WalMart started, there were no dollar stores by the hundred and no global-reach online "supermall" named Amazon.com or eBay. And their logistics system was the best in the world.
At that time, aiming low in small towns made perfect sense. Big urban areas were saturated with malls both big and small.
But that market is well-served today (by Walmart and Amazon, among many) plus consumer behavior has changed. A contrarian approach of going where the discretionary spending is makes plenty of sense. Instead of taking Walmart on directly, they are going where "they ain't" . Wee Willie Keeler would be proud of them.
Look where Amazon is dropping their stores in NYC: Hudson Yards, Soho...
Those are hardly places were dollar store merchandise is a big draw. Or Walmart. And the only payday loans you'll find in demand there are billed as "advance against sales".
If you're going into Soho, you're aiming at a fairly affluent consumer.
https://www.point2homes.com/US/Neigh...ographics.html
Are these the demographics of a dollarstore customer?
Quote:
Average Household Income $141,313
Median Household Income $75,412
Percent Increase/Decrease in Income Since 2000 56%
Percent Increase/Decrease in Income Since 2010 7%
Average Household Net Worth $1,108,237
Median Home Sale Price $2,381,250
Sales Tax Rate 8.875%
Average Household Total Expenditure $90,673
|
We can run the same drill for pretty much every AmazonBooks and Amazon Go location and come up with comparable numbers.
They're cherry picking.
Now.
Later?
We'll see what they're doing in five years.
No law says they have to do today what they'll do tomorrow.