Steve helps organizations understand and respond to retail disruption by creating customer-centric, memorable and profitable growth strategies.

The Price of Waiting

It’s pretty easy to calculate the cost of taking action.

When we contemplate a new investment we tally up the capital and operating expenses, prepare our cash flow analysis and try to account for the risk of pulling the trigger. Harder, but often far more important, is determining the price of waiting.

Twenty years ago it was pretty obvious that mall-based, moderately priced, department stores were going to become increasingly disadvantaged by two primary factors.

First, their power as places to go see a wide variety of different merchandise all under one roof was being eroded by more convenient off-the-mall options, from the rapidly growing off-price sector, as well as the expansion of  general merchandisers (think Target and Walmart) and category killers. The big impact from the expanding array of online business models would come a bit later.

Second, serving the peak of the bell curve was becoming a vulnerability. Indeed, their mediocrity was becoming everyone else’s opportunity.

Retail was starting to bifurcate and the middle was beginning a slow, inexorable collapse. More and more, success was being found at either end of a spectrum.

If we wanted great value and convenience, there was an expanding set of brick-and-mortar options that offered low prices, were generally closer to our home or office, and were far easier to shop. Amazon and other e-commerce providers were becoming more pervasive low cost and convenient options as well. On the other hand, if we wanted a more memorable experience, featuring differentiated products, a distinctive environment and some level of personal service, here too there were plenty of choices, including upscale specialty stores and luxury retailers.

The implications were also obvious. It was time to pick a lane.

First and foremost, this meant shifting to one end of the spectrum or the other, and finding ways to become more relevant to current and prospective high value customers. Eventually it was going to be death in the middle.

Second, instead of doubling down on a losing business model, investments needed to be shifted away from disadvantaged assets (i.e. massively over-spaced real estate in a declining distribution channel) to get closer to customers–physically and virtually.

Unsurprisingly, the share of retail spending held by moderately priced department stores has dropped precipitously over the past two decades, while Target, TJX, Ross, Amazon, Ulta and others have grown substantially. For the most part, Macy’s, JC Penney, and Dillard’s have all watched the last twenty years happen to them. And don’t even get me started on Sears.

Most recently, as just one example, Macy’s has decided it was worth trying smaller, more focused, off-the-mall formats, while increasing its investments in all things digital. To which I say: “2008 called and it wants its press release back.” In any event, so far they’ve opened 5 “Market by Macy’s” concepts and 8 free-standing “Backstage” stores. To say this is too little, too late, is a massive understatement.

For each of the last 20 years Macy’s (and their moderate department store brethren) mostly engaged in half measures as profitable market share leaked to dozens of competitors. It’s not the least bit difficult to understand why this was happening. I say this from first hand experience. And yet, every month, every quarter, every year, for the better part of two decades, these companies defended the status quo, working to become a slightly better version of mediocre and trying to cost cut and store close their way to prosperity.

Doing something radically different, deciding to let go out of the past, accepting that sunk costs are indeed sunk, and choosing to compete with yourself, typically seems like a high cost to pay. Until it doesn’t.

As it turns out, the price of waiting is often far higher.

And until Elon Musk invents a workable time machine, we don’t get the chance for a do-over.


For more on this, check out my 5-star rated book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption, available in hardcover, ebook and audiobook.

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"The Store Operations Council enjoyed every minute of Steve Dennis's presentation on retail's future. He always keeps it real and speaks the language of retail experts."

Cathy Hotka


Cathy Hotka & Associates


"The Store Operations Council enjoyed every minute of Steve Dennis's presentation on retail's future. He always keeps it real and speaks the language of retail experts."

Cathy Hotka


Cathy Hotka & Associates