In the 1980s, a new type of specialty retail chain started to emerge: “category killers.” These stores aimed to give shoppers access to every different size, style, and color of a product imaginable – all in one place and at reduced prices. Companies like Staples, RadioShack, Blockbuster, and Barnes & Noble spread into the 2010s, remaking how Americans shopped and steamrolled right over mom-and-pop stores.
The Downfall of Category Killers
However, the category killer’s time has passed. Toys “R” Us, Blockbuster, and RadioShack are gone, while Staples and Barnes & Noble are struggling and closing hundreds of stores. Bed Bath & Beyond, another category killer, recently filed for bankruptcy. The once-powerful retail concept was designed for a bygone era, with shifting consumer priorities and the growth of online shopping plays a significant role in their decline.
Online Shopping and the New Retail Landscape
In 2011, two Harvard Business School professors predicted that online shopping would lead to a collapse of category killers. Amazon, with its infinite product choices, took away the advantage category killers once had over rivals on product assortment. The lower-cost advantages that category killers enjoyed due to their scale also disappeared as companies like Amazon connected buyers and sellers, taking a fee on sales instead of holding inventory at costly warehouses.
Remaining Category Killers and the Future of Retail
Some brick-and-mortar category killers are still standing, such as Home Depot, Lowe’s, Dick’s Sporting Goods, and Best Buy. These companies sell products that customers often prefer to see and try out in person. Major trends like a strong housing market, more people playing sports, and innovative new gadgets have helped them stay afloat.
As more category killers fall, customers may be left with fewer options and lose out on convenience and product knowledge. The retail landscape continues to evolve, and the future of brick-and-mortar stores may depend on their ability to adapt and offer unique shopping experiences that keep customers coming back
The Rise of Online Category Killers
A new breed of online category killers has emerged, specializing in specific product categories and offering different price points. Examples include Warby Parker, which focuses on prescription glasses and sunglasses, Casper, which specializes in mattresses, and Harry’s and Dollar Shave Club, which offer shaving products. Unlike their brick-and-mortar predecessors, these online businesses compete not only on price but also on convenience and after-sales support.
Adapting to the Changing Retail Environment
To survive in the modern retail landscape, both traditional category killers and other brick-and-mortar stores must adapt to the changing consumer preferences and the rise of e-commerce. Strategies for success may include creating compelling shopping experiences, offering personalized selling, unique assortments, and sensory showroom experiences that border on entertainment. Additionally, retailers may need to combine their physical stores with online platforms, as Walmart is currently doing, to maximize flexibility and reach.
Conclusion
The story of category killers is a testament to the ever-changing nature of the retail industry. As consumer priorities shift and technology advances, retailers must continuously adapt to remain relevant and successful. The decline of traditional category killers and the rise of their online counterparts serve as a reminder of the importance of innovation and flexibility in the face of a dynamic retail landscape.
