Guitar Center Is Proof That Big Box Retail Is Ending
Standard & Poor's cut Guitar Center's debt rating to junk status because it doesn't expect falling sales and disappointing profits to improve anytime soon, retail analyst Eric Garland writes on his blog.
Guitar Center is indicative of all of the problems with traditional big box retail, Garland writes.
"Guitar Center has the remnants of an inferior business model, one that prizes huge brand names, big volumes, low wages and non-existent character," Garland writes. "I love walking through Guitar Center because I love playing anybody else's guitars - but otherwise it is a catalog with walls."
Because Guitar Center employees receive little training, they aren't experts on the thousand-dollar instruments the retailer sells, according to Garland. This pushes away consumers who want to make an investment.
This lack of investment in customer service is common at big box retailers-and could help explain the demise of Circuit City, Garland writes.
"Retail in the 21st century will be centered around specialized knowledge, unique offerings and personal relationships, both local and digital," he says.
If retailers can't offer a better experience in stores, customers have no incentive to visit.
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