Category Killers: Premature death knell?

Every so often, a retailing pundit declares an entire segment of the industry to be “dead.” First it’s the traditional department store (how’s Macy’s working out for you)…then Best Buy…then apparel retailers in general…you get the idea. The latest “victim” of a premature obituary is the “category killer” — but the segment is so broad and varied that this kind of declaration looks foolish. Here’s my point of view from a recent RetailWire discussion:

Category killers may be the victims of changing technology (the obsolete business model of the traditional book or record store, for example). But more often they are victims of their own poor execution, just like other retail nameplates that have disappeared over the years. Best Buy is a good example of a big box store that lost its way and has begun to recover through better execution and more innovative use of its own square footage. And the DIY big box stores have recovered nicely from their own missteps and the housing downturn.

Bottom line: There may be room for consolidation (Office Depot and OfficeMax, for example) but there is also space in the retail landscape for category killers who fill a relevant niche and execute well.

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