Welcome to Car Talk. This is not talking about cars, this is talking inside of a car. Today’s talk is about the retail transformation that is only just the beginning. Now, you might have been to a mall in the last couple years. You might have noticed it is not a great time to be at the mall right now. They’re constantly closing, shifting, and why? You probably already know why. It’s because you’re gonna get it on Amazon Prime instead, and you’re not gonna have to go anywhere, not deal with traffic, not deal with funny employees, and instead just get your stuff in two days from the comfort of your underwear in your living room, and that’s reality. That’s what people do, myself included. So the retail transformation is happening. There’s stores closing up. What prompted this is Toys”R”Us announcing bankruptcy plans, chapter bankruptcy, and there have been lots of companies in the last couple years that have gone under, done bankruptcy, shifted to online only, and this is a transformation.
And USA are not doing great, our companies closing up. My wife was a big fan of buying clothes at The Limited, that’s no longer around. Toys”R”Us which I’m surprised it stayed in business as long as they did. But what’s happening is all these companies that were not ready for the future are now suffering and going out of business, bankruptcy, et cetera. People I don’t think realize this is probably not the beginning, sorry this is not the end of the transformation. This is not the end. This is the beginning of the transformation. Because when any big plague or big change happens and things get hard in civilization, what happens? The weak get picked off first. Right or wrong, when there’s a plague or a huge illness that sweeps the country, the sick, the old, the kids get picked off because they are not as strong, to put it objectively speaking. So this is not unlike that. This is sweeping our world and our country, and the weak are getting picked off first. But that is just the beginning because make no mistake, things are only gonna get more intense in the next few years. You look in five years, right now, what’s keeping Walmart and Target really in business right now?
In my opinion, my two cents what’s keeping them in business is when people need things quickly. You need something right now, you need it in an hour, you need it by tomorrow morning. So with that being the case, things like Amazon Prime are not really a feasible option because you don’t wanna wait two days when you need something in a couple hours or tomorrow morning for now. But what happens in a few years when drone delivery is all polished up, and suddenly you order your Prime stuff and it’s just dropped in your yard in two hours. Why in the world would you deal with going to Walmart or Target if you could just have it in your yard in two hours? I sure know I wouldn’t. I know most people wouldn’t because right now that’s all that’s keeping them really in the game is necessity with time. You need something fast, you need it right now, you need it by tomorrow, you need it by tonight, so you go to Walmart, you go to Target, you need your household goods. But when that friction is eliminated and suddenly you get things in an hour, two hours, four hours, you might, you might sit, you might wait oh I’ll wait a couple hours and stay at home and watch Game of Thrones instead of dealing with the production that is going to Walmart or going to Target. And that’s gonna happen. So the weak have gotten picked off first, but the strong are what’s gonna be next.
And these big companies, I don’t know the future, I don’t know what Target and Walmart and these places are gonna be doing, but I do know that the world’s changing rapidly and it’s only just begun to change. The mobile transformation’s already happening. People don’t realize yet but it’s already happened. But what’s really gonna happen is the big ones are gonna have to adjust or be picked off, and right now the ones going out of business are like oh I kinda get it. I see why they’re going out of business, you never see anybody in the stores. Cheaper on Prime. But what’s gonna happen next, excuse me, what’s gonna happen next is companies you weren’t expecting to go under or file bankruptcy, those are gonna happen. So this is not over, the retail switch, this is just beginning. This transformation is only getting started, and the companies that you think are strong and healthy and have good balance sheets suddenly in five years don’t know how to get a single customer anymore because suddenly as it works, as the way right now, if you look at the scheme of the strength of companies as this mobile stuff is nicking away at it and influencers and all this, the weak ones are getting picked off, weaker weaker weaker.
But now suddenly getting to the strong ones, stronger stronger stronger, and the core ones are gonna be okay, but the ones that don’t embrace this and go hard on preparing for five and years from now are gonna be picked off. And they’re gonna be companies you’ve heard of and think they’re gonna last forever, then suddenly the ones you thought were gonna last forever are not gonna last forever anymore. So I implore you, I beg you, if you’re in a business, be ready for this. If you own stocks, be aware of this. In general just in life, go with the mentality realizing that there’s in the next couple years are gonna be businesses that you thought were never gonna go outta business are gonna go outta business. And use that to your advantage for opportunities, to protect yourself, protect your assets, protect your stocks, protect your balance sheets, protect all of that because this retail transformation is just beginning. It is not over, it is just beginning. The weak are getting picked off, and the stronger are still gonna get picked off in this retail transformation that is only just beginning. Car Talk, Tyler Douthitt.