Payless ShoeSource has found that its most recent bankruptcy wasn’t enough to make the business viable so it looks like it’s going to do it all again, only a few months later. This will mean closing all of its North American stores and also the online service as well.
To the extent that we claim that Amazon is the internet this is just another victim of Amazon’s success. Or, the other way of looking at it, how Amazon is making us all richer by killing off the less productive alternatives: Payless ShoeSource confirmed Friday that it will close its 2,100 stores in the U.S. and Puerto Rico and start liquidation sales Sunday. The company is also shuttering its e-commerce operations. The closings mark the biggest by a single chain this year and nearly doubles the number of retail stores set to close in 2019. “We expect all stores to remain open until at least the end of March and the majority will remain open until May,” the company said in a statement to USA TODAY. “This process does not affect the company’s franchise operations or its Latin American stores, which remain open for business as usual.”
Payless.com is no longer accepting online orders but its store locator was still working early Saturday.
There’s more to learn from this than just the one shoe store going out of business, there’s an underlying lesson too:
Payless is the latest brick-and-mortar retailer to suffer in the age of Amazon (AMZN), joining Toys “R” Us, Brookstone and clothing store Charlotte Russe. Online shopping has led to a drop in foot-traffic at US malls, which were a vital source of customers for stores like Payless.
“The pace of disruption in retail is widely acknowledged,” Greg Portell, a partner at consulting firm A.T. Kearney, told CNN Business. “Yet, the pace of change inside retailers continues to lag. Many retailers find themselves trapped in a cycle of continuing to chase consumer trends … Without bold action, the retail landscape will continue to be scattered with bankruptcies.”
Sure, bricks and mortar retail of shoes is being eaten by online. We all know what our shoe size is, it’s easy enough to plug that into a web form etc. So, we could just say this is bricks and mortar being eaten by online.
But there’s that deeper little lesson here too. Why couldn’t Payless work online? Why are they closing that as well? Someone, somewhere, is making it work for there’s no rise in the unshod evident out there, is there?
The reason being that organisations tend to become optimised to the method they use of doing things. Obviously enough, for it’s a competitive market out there and only those that are optimised survive anyway. What that means is that when what is optimal changes the organisation has a terrible time adapting to it. Most don’t and most go bust.
Even with the Payless brand to leverage they couldn’t and didn’t manage to transition to the new methods. Although, as above, someone obviously did get it right.
The importance of this being that, often enough, when what is optimal changes it’s better to let the old organisation die and to build anew – it’s easier to do that than it is to change the old organisation. Now all we’ve got to do is apply that to government bureaucracy….