A Minor Mind Dump

I’ve had a few ideas lately and come across some information I wanted to share. None of them seemed worthy of its own article, so I thought I’d just spew them out as they sprang into my mind. I have no idea how this is going to turn out.

First, a housekeeping issue. I know that Quiksilver, Zumiez and PacSun have come out with earnings reports. I am greedily collecting their press releases and conference call transcripts, but won’t have anything to say until they release their 10Qs or 10Ks. I just don’t think it’s worth your time to read, or my time to write, an analysis that doesn’t include the unbiased and completer information of the SEC filings. Hope that makes sense to you.

Next, I want to talk about the evolution of consumer habits as they relate to the internet. It wasn’t that long ago that I wrote about how being able to buy something and take it home was an advantage that brick and mortar retailers had over the internet. Somehow, last week I realized that probably wasn’t true anymore. I’m now perfectly happy buying on line and waiting a few days or even longer for the item to arrive rather than go out and buy it. And having asked a few other people (hardly a scientific sample I admit), it appears that I’m not the only one.
Now, if the price is lower or there’s no sales tax well or shipping is free, even better. And I don’t mind that delivery services have gotten better. But I don’t think those are the deciding factor. I think I’ve somehow just gotten comfortable with the fact that most of the stuff I need (think I need?) I don’t need the same day I decide to buy it.
If I’m right, and most people are thinking that way, then it would help to explain why small retailers are struggling and internet sales for most brands are growing so quickly.
But it’s not that one day people wanted to buy at the store and get their stuff and next day they were content to wait. It’s an evolutionary process that’s happening over years. The question is why it was only last week that I went, “Oh shit, how could I not have noticed this before?”
Maybe you all already knew this. But I haven’t seen any discussion of it, and I’ve always been kind of fascinated by how trends evolve and finally get recognized in business as a competitive opportunity (or problem).
I like to spot what I think are meaningful competitive trends and wish I could do it more often. I try and improve my odds by doing things like turning off the internet when I’m writing/thinking. Like now. Truth is, our brains aren’t designed for multitasking and there’s no email that’s going to arrive that can’t wait until I’m through writing.
I pretty much flee the mainstream media because I consider it to be mostly human interest stories and noise rather than hard news and analysis.
I thought I would share with you this article about Spain on a web site called Stratfor.  If you do business in Spain, I think you’ll find it valuable and you’ll get more good information about conditions in Spain in the 15 or 20 minutes you spend reading it than you will get anywhere else. If nothing else, you’ll probably notice that the unemployment rate of Spaniards age 25 and under is 45%. We kind of sell a lot of stuff to that group.
I pay for Stratfor, but it’s free right now. It seems they got hacked by Anonymous and are still trying to recover. Very embarrassing to be a global intelligence/security firm and have to admit that your subscribers’ passwords weren’t encrypted.
Okay, I’m done. I’ve editorialized a bit but enjoyed it. As long as I’m doing this for free, I’m allowed to have some fun. Go check out Stratfor. It’s worth a few minutes of your time every day.    



10 replies
    • jeff
      jeff says:

      Hi Heather,
      I was just pointing out something I think I’ve noticed. Vicki did a much more thorough job of looking at the whole internet situation. Thanks for pointing it out.


  1. Rob Valerio
    Rob Valerio says:

    Two things I’m seeing with my consulting customers in the online and retail store space (outside of action sports):

    Online works when you are not reselling a major label. If you have your own products, great. If you are selling national brands, get a new business model because Amazon is selling the same products for zero margin and you cannot compete right now.

    Second, if you have a retail store, again be happy to sell unique products for short periods of time. Once a larger retailer finds the new brands or items that sell well, you can’t compete on price. Hence at all retail outlets we will see a trend towards house brands away from national brands.

    To your point Jeff, what has happened is that the percentage of all retail sales that are not immediate-must-have-now is down to 80% of purchases. I just reported this in the shoe market to one of my clients. Part of that 80% is food, so there will always be some portion that is get-in-the-car to buy items. Everything else is up for grabs by internet retailers who can put a warehouse close enough to deliver next day (or soon) same day.

    Remember the dot com online grocers? They were ahead of their time in 2000 but someone like Amazon is going to get it right soon. And then we won’t have any reason to leave our house except for work!

    • jeff
      jeff says:

      Hi Rob,
      I’m not prepared to say that a specialty retailers can’t or shouldn’t carry any major brands, but I agree with you that they certainly need to be careful about which ones and how much. You said the the percentage of retail sales that are not immediate-must- have-now is down to 80%. Don’t know where you got that number, but as I think about my own shopping habits, it feels like besides food, gasoline and maybe some other services (dry cleaning? restaurants?) there isn’t much I need to go out for. Do you really think it’s as high as 80%?

      Thanks for the comment.

  2. Reid Williams
    Reid Williams says:


    I think your right about the gradual evolution of people’s willingness to wait for shipping, as opposed to getting it now from the store. It wasn’t so long ago people were hesitant to enter a credit card number online in the first place.

    As I’m sure you know, Amazon offers free 2-day shipping through its Amazon Prime service. Take a look at the impact it’s had on sales, according to this infographic:

    • jeff
      jeff says:

      Hi Reid,
      That’s a great infographic. It’s stuff like that that gives us a whack on the side of the head and helps us see where things are going.


  3. Bob Culbertson
    Bob Culbertson says:

    As a small retailer I concur with your personal perception as it aligns with the behavior of our customers shopping local. Waiting a couple of days for free freight, no sales tax, but honestly not a lower price seems to be the watchword of people buying longboards online.
    As you know a competitive advantage is something that others are unable or unwilling to do. As a retailer I absorb the freight in COG(willing), the retail price is the same (willing) what I am unable to do is not collect sales tax. At 9.35% tax, that is a twenty dollar bill on a average
    longboard purchase, which to many people apparently is worth the wait.
    My problem with this thinking is I enjoy having a police department, fire, paved roads and other city services paid for with sales tax.
    My thoughts on this we as small retailers we headed the same way as USA manufacturing in the late 90’s and early 2000, closing. People now seem to be aware that not everything has to be made in China and we need jobs here, even though it costs a little more.

    We have a sign in our store next to the longboards: “Please stand on our boards, just remove your shoes and remember where you were able to touch it.”

    • jeff
      jeff says:

      Hi Bob,
      And I also imagine that with gas blasting through $4 a gallon, nobody’s quite as anxious to drive anywhere.

      Especially on a long board, the sales tax difference becomes a real number. I love not paying sales tax, but I also recognize the inequity of the current situation.

      Thanks for the comment,

  4. DJ
    DJ says:

    PSUN implied 1Q to date comps are off 4% – that is something you need the transcript for and won’t see in the 10Q 

    • jeff
      jeff says:

      Hi DJ,
      You’re right, and I’m in the middle of reading their conference call transcript. I didn’t mean to suggest I ignore either the transcript or the press release, but I also think there’s important information in the filings and I like to have the whole picture before writing.

      Thanks for the comment.

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