The closing announcements of Sears and Kmart stores in Puerto Rico and the United States, and the recent closing of few Sam’s Clubs earlier in the year send us a message: the retail business and shopping centers are not as usual and is quickly moving to a different model.
Recently, the secretary of economic development of Puerto Rico (DDEC), in reaction to these closures, said that this situation represented a great opportunity for Puerto Rican entrepreneurs to adopt these models and turn them into local companies.
What would be better than if the Sears and Kmart stores on the island could be replaced by models similar to González Padin or Velasco, which disappeared several years ago, and that the JF Montalvo Cash & Carry chain could open the closed Sam’s Clubs stores in Barceloneta, Rexville, Humacao and Carolina! Believe me I would be the first one jumping on one foot!
However, these closures do not respond to mismanagement or recession, which by the way, we are not in recession, I mean the American economy. The reality is, that the world of retail is changing and the challenge is how we can be ahead of that change.
Predicting that mega chains such as Walmart, Macy’s, Home Depot, Ross, JCPenney are going to disappear is unlikely, what is predictable is that they will transform their models to ones based on innovation, differentiation and relevance, integrating technology and a service aligned to a different experience, which includes, but is not the only one, shopping.
I would not be surprised to see very soon in a store of this nature a childcare, a nursing room, a medical office, a playground among many other initiatives that justify the visit of the client beyond the current business model. Why do I bring this issue? Because it seems to me that there are opportunities for the local entrepreneur to operate these concepts but in a different way.
Likewise, for the shopping centers it represents a great challenge. I recently attended my grandson’s birthday at the Canóvanas outlets and, to my surprise, almost half of the shopping center was occupied by a top notch center of entertainment that included from a track under the roof of “go karts” to game machines, restaurants, bars, in short a whole concept for the family. By the way, the place was packed with people.