This week I went into a store to get a gift for a friend’s baby shower. The second I stepped into that store my investor mind kicked in. I immediately started to identify several inefficiencies that made the entire experience extremely frustrating, stressful, and time consuming.
Inefficiencies included but were not limited to – (1) Very limited staff that was practically non-existent. (2) 95% of the registry was not available in the store and was also not available for pick up at any surrounding stores (I checked!). (3) Whatever was actually in the store was extremely hard to find.
The investor in me proceeded to look up this particular store to see if it was publicly traded. I immediately found out it was bought by a private equity firm several years ago so is no longer public. Thank the lord! I wonder how that stock was doing before it went private. Or maybe management saw what was coming and decided they were better off closing shop to investors.
It didn’t take long for me to be reminded that brick and mortar retail is dying a slow but sure death and we should all probably keep that in mind when making future investing decisions.
One way you can identify amazing or horrible investments is by taking a closer look at your personal experience as a consumer when interacting with a business in any way.
Do you walk away feeling great – perhaps you got a great deal, didn’t waste a lot of time and even got some bonus rewards in the process? OR did you walk away feeling like you wasted your time and telling yourself you’ll never spend a penny with that business again?!
These perspectives matter a whole lot. Specially if you have choices as a consumer and can go elsewhere to spend your hard earned money.
Maybe the decision is not so easy if the business you are dealing with has some kind of monopoly going on. However, if there is competition and people have choices – the investor in you should have their eyes and ears peeled for opportunities as you explore your options.
At the very least, consumer experiences can help you identify which kinds of businesses you should be avoiding when it comes to allocating your investing money.
Times are changing in our favor as long as we are taking advantage of those disruptive companies that are there to make our consumer lives easier while also making investors richer in the process.
There is a reason why Amazon (NASDAQ: AMZN) stock stock price has returned over 1,000% in the past decade alone while traditional brick and mortar retail businesses are decaying at a rapid pace.
The proof is in the pudding.
Some people may get sticker-shock when they see Amazon’s astronomical stock price. Is good to remember there’s a reason for that.
“It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
At the end of the day, I take full and complete responsibility for waiting until the last minute to make my purchase. I could have easily saved myself from wasting my time by shopping online well in advance from the comfort of my own home with the added bonus of free delivery and zero headaches. Lesson learned.
I would also like to point out that Amazon is not our only option. There are brick and mortar businesses out there that do an amazing job with their online sales strategy making it easy, stress-free, and convenient for the consumer to make their purchases. I ended up purchasing the gift from a company that is not Amazon and that experience was actually quite easy and seamless.
There are also those businesses that have stayed behind of the times significantly and have been suffering greatly for it. Those are the kinds of businesses we should be cautious of specially as investors.
What are your thoughts on brick and mortar retail stores? Do you think it depends on the business and some do a better job than others in taking care of the consumer and can also make great investments?
Do you feel days are counted for brick and mortar and we should keep those type businesses out of our portfolios? Share below! 🙂
Cheers to profits!