Toys R Us Chairman Jerry Storch makes the case on Squawk Box that brick-and-mortar stores won't...

Toys R Us Chairman Jerry Storch makes the case on Squawk Box that brick-and-mortar stores won't go away anytime soon, but will morph into mini-distribution centers. The line of thought follows a recent trend by retail players of using existing stores as fulfillment centers and showcasing more extensive pick up options to online buyers. The end game: Retail stores see a competitive advantage over Amazon if they can deliver products faster as they still dream about ultimately offering the holy grail of online shopping - same-day delivery.

From other sites
Comments (13)
  • Tom Walker
    , contributor
    Comments (33) | Send Message
    Especially low priced impulse products like the dollar chains but especially DLTR.
    25 Sep 2012, 01:22 PM Reply Like
  • Intangible Valuation
    , contributor
    Comments (593) | Send Message
    What do you mean? Why would someone pay shipping on something from a Dollar store? E.g., the average transaction at DG was $10.85 or something. Adding shipping to that puts the price at $14... consumers are probably not going to go for that. Retail stores probably have an advantage in durable goods -- not consumables.
    25 Sep 2012, 09:43 PM Reply Like
  • Mike.R
    , contributor
    Comments (2) | Send Message
    I go to Amazon and buy a wireless mouse, history book and coffee beans and they all show up at my door the next day, and all in ONE BOX. It's amazing - good luck beating that Toys R US or BBY.
    25 Sep 2012, 05:06 PM Reply Like
  • User 364659
    , contributor
    Comment (1) | Send Message
    The fallacy in the thesis is that the economics of using existing stores as retail fulfillment centers in terms of size, location,and other lease terms are not as efficient as Amazon fulfillment centers would be should they choose to adopt this means of distrribution,
    25 Sep 2012, 05:43 PM Reply Like
  • ConservativeOutperformer
    , contributor
    Comments (768) | Send Message
    The fallacy is embedded in your reasoning......


    Show me where AMZN is operating more efficiently than WMT... If they are so fantastic at distribution now, why are they building like crazy? Why can't they beat WMT on price by 10% or more on every item? You realize they're simply driving margins lower over time and turning into a giant retail operation as fixed assets continue to escalate, right??? Just like the businesses they claim to be "killing" with high operating costs........


    The facts are they have already chosen to adopt this means of distribution and they are not currently showing any economics advantage, nor do they have a plan for how it will be an advantage in the future. AMZN's legacy will be redefining the distribution of books and marginalizing the poor B&M retail operations while slowly forcing them into bankruptcy. Consumers will benefit enormously. From this point forward, however, not only is it unclear if shareholders will benefit, it seems increasingly unlikely given the outrageous multiple assigned to a business that one day MIGHT be lucky to achieve 7% net margins......


    Good luck!
    28 Sep 2012, 02:21 AM Reply Like
  • StLoMoDan
    , contributor
    Comments (117) | Send Message
    This almost looks like a full circle in retail. Remember the catalog stores like service merchandise that were popular in the 60's and 70's? Customers had catalogs at home which they could call in their orders for pick-up or visit the store and order on sight. These stores are still popular in the UK.
    Today the catalogs have been replaced by the internet but the end results are the same.
    25 Sep 2012, 05:52 PM Reply Like
  • billddrummer
    , contributor
    Comments (1761) | Send Message
    This comment is from a thread about Circuit City, which was posted before that company liquidated:



    Imbedded within the comment is a link to a thread on The Motley Fool dated 7/10/2007, where I suggest the company turn its stores into pickup points for online purchases.


    Apparently, that idea has resurfaced in the bright shiny world of 2012.
    25 Sep 2012, 07:51 PM Reply Like
  • Intangible Valuation
    , contributor
    Comments (593) | Send Message
    I'm a fan of the fact that you've been around SA so long that you can quote stuff from 2007.
    25 Sep 2012, 09:45 PM Reply Like
  • billddrummer
    , contributor
    Comments (1761) | Send Message
    Thanks for the kind words.


    I like SA.


    I just miss the Dislike button.


    Recently, its absence has been palpable.
    26 Sep 2012, 07:40 PM Reply Like
  • bsharks26
    , contributor
    Comments (195) | Send Message
    People talk like Amazon carries unique products. They are a classier eBay when all is said and done. Americans still want the "right now" experience and Amazon, in all its speed and glory of delivery, cannot deliver on this. The notion that a Toys R Us is there for showrooming for Amazon is quite absurd. Why not say all stores are just for showrooming at Amazon? Target...brose and shop at Amazon.
    26 Sep 2012, 08:08 AM Reply Like
  • denniskoci
    , contributor
    Comments (2) | Send Message
    I've been short BBY for a while, but my experience yesterday may change my mind. My 2006 26" flat panel gave out and the cost of replacing the board is the same as a new low end panel. I found the samsung model I wanted and when I compared amazon with BBY online, the price was the same now that amazon lost its sales tax advantage. Drove to goodwill to drop off the old and went to nearby BBY to 'showroom.' Met a floor expert, not the usual kid carrying around a name badge I use to find. He explained smart tv and 3d ready and wireless interface capabilities. I wanted it now, and he checked with another store that set it aside for me. I bought a new sound bar and paid for both at store 1. On my way home, stopped by store 2 and no hassle pu and drove home with both items. Leveraging their footprint (before it gets reduced anymore) price parity with AMZN, and leveraging inter-store inventory may be BBYs way out of the mess they're in
    26 Sep 2012, 10:09 AM Reply Like
  • billddrummer
    , contributor
    Comments (1761) | Send Message
    Your experience is a way that BBY can successfully fend off the internet threat.


    I believe the key to your experience was the salesman's competence.


    Competent salespeople can win the day.


    Kids with new name badges can't.
    26 Sep 2012, 07:42 PM Reply Like
  • GeorgeMason
    , contributor
    Comments (129) | Send Message
    It would work for some stores maybe BUT FOR ONE THING:
    In the store JCP traditionally never has your size or the color/print that you want and for the past year now the online catalog never has any stock though they continue to advertise what they don't have long after it's gone. Now they put out a small monthly catalog of merchandise they expect to have in the store or online someday. And you want us to believe the store could be a fulfillment or mini-distribution center where we can get it today? Hahahahahaha!
    26 Sep 2012, 10:42 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs