The recent pandemic shutdown has hit small businesses hard. Already fighting for survival during the Retail Apocalypse, a large reduction in foot traffic has caused many stores and restaurants to shut down in the past months. What happens when the Mom-and-Pop stores go out-of-business because they can't survive in the current pandemic climate? Who fills that void of specialty shops? How might Amazon exploit this opportunity?
The oldest comics shops date to the 1960s, and most of the best started in the 70s and 80s. These stores are mostly sole proprietorship businesses ("Mom-And-Pop") which carry a lot of legal risk. Many comics shops also carry a lot of inventory and operate on tight budgets.
At best, these aging owners will figure out how to pass the torch, allowing younger employees to buy the store and continue the legacy. (This is not uncommon; New York City vegetable grocers are generational, with Jewish owners selling the store to their Korean employees, the Koreans selling it to Caribbean immigrants who are now retiring and selling to Latinx immigrants.)
The second option, conglomeration, is less likely, but has been done before with great effect, especially with local chains: Blockbuster Video in the late 1980s. Wayne Huizenga acquired many regional video rental stores, creating a nationwide chain which became synonymous with the category and the 1990s. It happened again, on a different scale, as Barnes and Noble's Leonard Riggio acquired and conglomerated Babbage's, Software Etc., and Funcoland videogame stores into GameStop.
If done correctly, especially via smaller chains and single stores, the former owners and employees are retained to maintain the unique customer service and community of that locale while updating store systems and branding.
The third option is sometimes the easiest for corporations: wait. Wait for your competitor to make a critical mistake, and then either acquire that business for pennies on the dollar via bankruptcy auctions or stock acquisition, or fill the vacuum left in the market after the company leaves. Sometimes, a company is proactive by region; they see a competitor having trouble in one market or neighborhood, so they enter that area, sometimes by placing a store directly across the street from the competitor.
All three are possible in the Direct Market of comics shops. As with Blockbuster and Borders, computerized inventory systems created successful chains which created efficiencies and profits. Comics shops are unusual retail stores ... they sell a significant amount of product which is "used" or collectible. That requires more expertise from the store owner, but that can be learnt and taught, and even retained if the owner is kept on as an employee. It can also be consolidated and shared more easily with other stores in the chain.
What are the odds that Amazon or another retailer will consolidate comics shops? Pretty good, even in the tough "retail apocalypse" of the past decade. Comics shops create a sense of community among fans and shoppers, based on beloved characters and franchises which are constantly being refreshed and replaced. Unlike most other specialty retailers, comics fans and gamers shop on a periodical basis, as new releases have strict on sale dates and fans are eager to get The Latest Thing. GameStop and Blockbuster were fueled by strong fandoms. Like Barnes & Noble and Tower Records, these stores offered a large amount of items, allowing for discovery and acquisition. Even after chains have disappeared from a retail category (like music), fandoms continue to support independent stores ... they need their fix, and will patronize a record store selling LPs, an antique store selling collectibles, a video store selling DVDs and VHS tapes, or a local ren faire or comic-con offering lots of cool merchandise.
Can a comics shop chain exist and thrive in a small-pond market? I think it's a matter of scale. If Mile High Comics, Lone Star Comics, or Newbury Comics can create a multi-faceted retail chain of stores in a metro area, it is not difficult to expand that nationally. This is how retail corporations originate; someone opens a store, offers a shopping experience which encourages loyalty and innovation, and then competes locally, regionally, nationally.
While Amazon is still considered an online retailer, they have invested in many other industries such as film production, electronics, healthcare, and satellite communications. Their acquisition of Whole Foods Market for $13.7 Billion in 2017 showed that Amazon is not adverse to retail locations, and Whole Foods stores now not only host Amazon Hub Lockers, they also feature Amazon products and services on the sales floor. Amazon also operates Amazon Books, a bookstore chain with 23 locations nationwide. There is also Amazon 4-Star (curated retail), Amazon Go (gourmet grocery), and, circling back to my previous analysis, Amazon Pop-up. Their pop-up stores are permanent, and feature rotating themed inventory, which has included Marvel's Avengers franchise in the past. I would not be surprised if Amazon Pop-up stores become the next staple of shopping malls.
As of 2019, physical retail accounted for only 6% of Amazon's net revenue, but that 6% equals $17.2 Billion. While the current pandemic has paused the global economy (aside from online sales), I expect both the percentage and net revenue figure to rise in the future, partly from filling a void created by empty storefronts, but also from filling the actual physical storefronts. Whole Food Markets and other groceries are re-purposing empty box stores. (My local Whole Foods was built in 1979, housing a Shepler's western wear store, and was remodeled in 2005.) Grocery stores and comics shops are destination retail, as are boutique stores such as Apple and Amazon Books. If there is enough foot traffic and affluence, either on a sidewalk or inside a shopping mall, then smaller stores like the four concepts mentioned above will work, as small retail bays are more likely to be available at a lower cost.
Of course, if those bays aren't available, then the Treasure Truck fills that gap. Brilliant, no? It's kind of a bastardization of the Mason Jar parable, as Amazon tries to fill every shopping niche. It reminds me of Clock King's iconic giant hourglass trap, except that it starts with golf balls, not sand, and small business retailers are the intended victims.
Is this the zero hour for comics shops? Are the sands of time really running out for the Direct Market? At long last has it met a gritty, granulated, inglorious fate? Only time will tell... Tune in soon, as I discuss ways that comics shops can compete now and in the future!
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