Failing Retailers

One of the biggest surprises in lieu of the economy has been the failure of businesses which two years ago were booming. Some of these businesses include Circuit City, Toys R Us and Goodys. At a time when the American Economy was booming, these bussineses and many others were doing extremely well. Because of this, these companies going out of bussiness have left many people puzzled as to why they cannot survive but other similar bussinesses are able to make it.

Although these bussinesses may have appeared promising, it turns out there were many problems that were never fixed and never needed to be because our economy was prosperous enough that "perfect bussiness tactics" weren't required. According to an article from Time Magazine called "Why Circuit City Busted, While Best Buy Boomed," written by Anita Hamilton, Circuit City was making very bad bussiness choices escpecially in 2007. In 2007, Circuit City laid off its highest paid hourly employees and replaced them with cheaper workers. Clearly this led to the downfall of Circuit City costumer service. This is only one reason as to why Circuit City could not hold on. There were also quite a few accounting errors that also aided in its down fall.

Another interesting aspect of the many recent retail failures is how good internet retailers are currently doing. At the time when gas prices went through the roof around December, internet retailers were making high sales. Why waste the time and money to go to a store when you can just buy what ever you need through the internet? According to eCommerce Optimization, "... we have seen the Internet change the way in which consumers shop and buy the items they like. Online shopping has become increasingly popular since eCommerce first began and industry trends do not show any signs of this trend slowing down any time soon."

Although some of the bussinesses collapsing are multichannel, it seems that the most successful bussinesses are solely based through the internet such as Amazon and Ebay. It is possible that if companies who are multichanneled managed their internet sales more efficiently, many problems would not arrise. The most interesting part is yet to come. When the economy is back on its feet, will so many bussiness failures still be happening?