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For Four Retailers, Do or Die
The Wall Street Journal ^ | December 27, 2012 | ANN ZIMMERMAN And DANA MATTIOLI

Posted on 12/27/2012 8:46:58 AM PST by MinorityRepublican

While 2013 will be a tough year for retailers due to the tepid economic recovery, a few in particular face a critical 12 months. Their experiences highlight the challenges facing store chains, from increasingly cautious consumers to fierce online competition.

These unlucky retailers are going into the New Year with extra woes: slipping sales, questionable strategies and tight finances—which is why they are the ones to watch, and not in a good way.

Best Buy Co. BBY -1.22% has been plagued by the retail phenomenon called "showrooming," where shoppers examine products in its stores but buy online through rivals. A quarter of shoppers who said they had showroomed had done so at Best Buy, according to a recent Harris Poll, so analysts will be watching to see if it can capture more of those sales on its own website.

J.C. Penney Co. JCP -4.48% has been trying to ditch its image as an old-fashioned department store where Middle America went seeking bargains. But its rapid and radical makeover has left it burning through cash and struggling to attract shoppers, leading to questions about how long the company can afford to stick to its new strategy.

RadioShack Corp.'s RSH -5.29% bet on mobile phones and tablets has backfired. It has sold more of these low-margin devices but is making less money than it did retailing old standards like cameras and computers. Though it staved off a cash crunch earlier this year by suspending its dividend, mounting losses cloud its future.

(Excerpt) Read more at online.wsj.com ...


TOPICS: News/Current Events
KEYWORDS: bestbuy; jcpenney; radioshack; sears; storechains; storechainsales; storechainsstruggle
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1 posted on 12/27/2012 8:47:00 AM PST by MinorityRepublican
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To: MinorityRepublican

What’s the fourth?

The article is behind a pay wall.


2 posted on 12/27/2012 8:51:59 AM PST by Jonty30 (What Islam and secularism have in common is that they are both death cults.)
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To: MinorityRepublican

So who is number 4? I have no intention of signing up to WSJ.com to find out.


3 posted on 12/27/2012 8:52:15 AM PST by Bloody Sam Roberts (Liberals are a wrecking crew dismantling civilization by replacing what works with what feels good.)
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To: MinorityRepublican

The link won’t let you read the story. What is the 4th retailer?

BTW, nobody mentions the real reason Penney’s is down. They were pushing their pro-homosexual agenda in their ads. That didn’t go over well with Penney’s core customers who are mostly middle-aged and older women.


4 posted on 12/27/2012 8:53:23 AM PST by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: MinorityRepublican
While 2013 will be a tough year for retailers due to the tepid economic recovery


5 posted on 12/27/2012 8:54:08 AM PST by Right Brother
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To: Jonty30
What’s the fourth?

Sears. Malls would flip over like Guam if you lose the anchor store at one end without losing the anchor store at the other.

6 posted on 12/27/2012 8:54:19 AM PST by KarlInOhio (I'm tired of being beaten like a malcontent elf so Obama can pretend to be Santa.)
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To: MinorityRepublican

Best Buy can just suck it. I refuse to go into a store that persists in believing that every customer is a frigging thief and relentlessly stops each customer for their papers (their receipts). I also hate your ‘salesmen’ techies that think they’ve got a degree in electrical engineering telling me I need a $200 roll of 25’ monster wire for my speakers.

JC Penney can just suck it, too. In 1986, I had their effing car insurance and had the misfortune of buying a a Nissan 300ZX Turbo; they promptly notified me they would not renew my policy. It is why I am with Cotton States insurance, still these 26 years hence. JC, just suck it! I hope you lose your ass and your cash. You just stay right there in those mauseleums we used to call Malls and die.

Radio Shack, you’ve been there when I needed you, and although you charge more for items of an electronic nature for the enthusiast, I won’t begrudge that because you are convenient. Hope you find a way to emerge successfully...


7 posted on 12/27/2012 8:55:11 AM PST by Gaffer
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To: MinorityRepublican

We call it “Phone Shack” now;although the store has other products and eveen some electronic parts,the parts like switches,resistors,ICs are hidden in opaque metal drawers in cabinets at the back of the store where few would notice.I would guess close to one-half the store space is phone s and related products.


8 posted on 12/27/2012 8:55:32 AM PST by hoosierham (Freedom isn't free)
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To: MinorityRepublican

Had not thought of Radio Shack but they might be in the worst shape of the bunch.

Thousands of stores meaning high overhead, and virtually the entire product mix is now related to cell phones, which can be bought at many other places. (the inside joke is “try and find the radio!”)

I remember them from my youth as the place you’d buy small electronic parts for hobbies. Not anymore.


9 posted on 12/27/2012 8:55:52 AM PST by Buckeye McFrog
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To: MinorityRepublican

Last time I shopped at Loews for a Dryer, I told them the rice was lower on the internet, they matched the internet price.


10 posted on 12/27/2012 8:56:07 AM PST by Venturer
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To: Jonty30

Headline said Sears.


11 posted on 12/27/2012 8:56:08 AM PST by deweyfrank
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To: MinorityRepublican

IMHO, Sears should transition its stores into a “home center” type of business - concentrate on hardware, major appliances, and automotive. Get rid of clothing, housewares, jewelry, sporting goods, and everything else.


12 posted on 12/27/2012 8:59:38 AM PST by GreenHornet
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To: deweyfrank

Good observation.

I congratulate you. :)


13 posted on 12/27/2012 9:00:48 AM PST by Jonty30 (What Islam and secularism have in common is that they are both death cults.)
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To: Buckeye McFrog
I remember them from my youth as the place you’d buy small electronic parts for hobbies. Not anymore.

Yep. Like an up-thread poster, I call them "Cell Phone Shack".

I also resent that I'm badgered for personal information when I attempt to buy anything (including batteries).

14 posted on 12/27/2012 9:01:03 AM PST by Washi (Socialism is Slavery)
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To: hoosierham

Even their bankruptcy a few years back was botched. When Circuit City bought them out, they forgot to buy the Canadian trademark which was picked up by a rival. The courts gave them 48 hours to re-brand all of their stores and private label merchandise and the Circuit City brand was unknown here. Their current incarnation bought by Bell Canada when CC went bankrupt.


15 posted on 12/27/2012 9:02:02 AM PST by Squawk 8888 (True North- Strong Leader, Strong Dollar, Strong and Free!)
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To: Gaffer
I like Radio Shack for their service, convenience and selection and Sears for their tools. I don't mind paying a little extra in either case. Sears has awesome tools which don't break and do the job, something which isn't all that easy to find now that Husky and other once great quality brands are being made in China.

But I basically agree with you about Best Buy and JC Penney.

16 posted on 12/27/2012 9:03:50 AM PST by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: Buckeye McFrog

I think shifting their focus to consumer electronics was a huge mistake. Everyone sells gadgets but the hobby market is badly under-served these days.


17 posted on 12/27/2012 9:03:57 AM PST by Squawk 8888 (True North- Strong Leader, Strong Dollar, Strong and Free!)
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To: MinorityRepublican

Radio Shack, a main stay for me for 40 years. But electronics is not the hobby it once was and no one “fixes” anything anymore because it is either to hard or to cheap not to just replace it.

I still piddle around and every once in a while need something, but with folks like me disappearing over the years RS has been searching for its place. I fear it may not find it.


18 posted on 12/27/2012 9:04:39 AM PST by ejonesie22 (8/30/10, the day Truth won.)
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To: Jonty30

The WSJ’s paywall is a strange, if futile, beast.

Copy and paste a couple of paragraphs from any story into Google and you get link to the full story like this:

http://goo.gl/X2SV4

Odd but as long as it works I don’t question it!


19 posted on 12/27/2012 9:05:08 AM PST by relictele
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To: GreenHornet
IMHO, Sears should transition its stores into a “home center” type of business - concentrate on hardware

Pffft! I refuse to shop at Sears for hardware anymore. I used to swear by Craftsman tools for everything, esp. their automotive tools. They used to warranty everything for life. Any time I broke a Craftsman tool or part, bent a box wrench, or tore up a socket wrench, I could go back and get a replacement free of charge.

Nowadays, they make inferior products and don't warranty them unless you pay an exorbitant replacement warranty fee, and knowing how Murphy's Law works, it always breaks AFTER the warranty period is up. I point to several drivers, a shop vac, two reciprocating saws, a table saw, and a router as proof.

I've gone over to De Walt, Makita, and Kobalt almost exclusively. At least the products go the distance.

20 posted on 12/27/2012 9:06:03 AM PST by rarestia (It's time to water the Tree of Liberty.)
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To: Jonty30

Sears is the fourth. I can’t figure out how they’ve survived as long as they have.


21 posted on 12/27/2012 9:06:50 AM PST by Fido969
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To: KarlInOhio

You’ve got that nailed. A number of already dying malls are going to go under rapidly if they lose anchor stores at both ends suddenly (including the one right down the road from me)


22 posted on 12/27/2012 9:07:11 AM PST by Buckeye McFrog
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To: Vigilanteman

I agree with you about Sears (I’ve taken tools that broke after 40 years and gotten replacements, and I can get parts for tools and things older that my 30 year old daughter - recently refurbished a 20 gallon compressor that was just plain wore out - $100 parts, new one was $250), and you know my feelings on RS. Even if they don’t have it in their store, they online very well.


23 posted on 12/27/2012 9:07:45 AM PST by Gaffer
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To: Bloody Sam Roberts

Subhead and html title both viewable outside they paywall say number 4 is Sears (kind of a shame — Sears is a nice hardware and appliance store that also happens to sell clothes).


24 posted on 12/27/2012 9:10:10 AM PST by The_Reader_David (And when they behead your own people in the wars which are to come, then you will know...)
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To: Squawk 8888

I knew we were in trouble when they started to dump their in house brands (Archer, Optimus, Realistic etc.) for name brand items. John Roach started the idea of becoming an electronic boutique after the Video Concepts disaster...


25 posted on 12/27/2012 9:10:10 AM PST by ejonesie22 (8/30/10, the day Truth won.)
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Comment #26 Removed by Moderator

To: Fido969

Every large appliance in my home is SEARS. My lawn mowers, too. Why? I can get parts for decades. I’ve become a microwave repairman, refrigerator repairman, a dishwasher repairman, a washer repairman, and a dryer repairman.

My mowers are at least 20 years old and look and run like new.

That’s why.


27 posted on 12/27/2012 9:10:55 AM PST by Gaffer
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To: hoosierham

I was working on an old radio awhile back and need a few caps. I went to RS on an outside chance I might get lucky. The kid at the counter asked if he could help. I said I doubt it. He looked hurt so I told him what I was looking for. I said, “Do you even know what a capacitor is?” To my astonishment he said yes. Of course he lied. And of course they didn’t have the part.


28 posted on 12/27/2012 9:12:08 AM PST by logitech (Who's here so vile, that will not love his country? If any speak, for him I have offended)
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To: Washi

Their lazy, intrusive marketing practice backfired over time to the point where they had to post a smarmy notice at the registers from the company president about why they did it - but they still asked for the data (!?!). The mind boggles. I support free enterprise but some of the decisions made in the boardroom vacuum are insane.

In the end, it cost them more customers than it retained since Radio Shack became synonymous with tedious data entry of personal details.

Radio Shack is now trying to be Best Buy in 10% of the floor space so you can imagine how that’s going. Pricing on many computer accessories, cables, etc. is highway robbery and they are obviously going for the ‘over a barrel’ customer whom they can gouge.


29 posted on 12/27/2012 9:14:18 AM PST by relictele
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To: relictele; Jonty30

Ah heck - link broken :(

Anyway the Google method works...


30 posted on 12/27/2012 9:16:34 AM PST by relictele
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To: MinorityRepublican

I must be old fashioned I love best buy i go in and look and touch the item i want fork over the money and load it it in my truck and take it home Even if it cost more


31 posted on 12/27/2012 9:18:48 AM PST by al baby (Hi Mom)
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Comment #32 Removed by Moderator

To: MinorityRepublican

Circuit City had the right idea how to deal with showrooming. They let you buy from their website and then go pick the item up immediately at the nearest store. Of course, that meant their website had to have real time inventory data for every store in the country - and that is way beyond the capabilities of most retail company IT departments.


33 posted on 12/27/2012 9:20:17 AM PST by SeeSharp
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To: relictele

Service Merchandise was one of the forerunners in harvesting intrusive information for marketing purposes (phone numbers, home addresses, etc.). Started that in the 70’s I think. They always touted their strict privacy policy. Until the late 90’s when they were careening towards bankruptcy. Then they abruptly issued a policy change and sold everything but the kitchen sink to third parties.


34 posted on 12/27/2012 9:21:11 AM PST by Buckeye McFrog
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To: Jonty30

Thank you. You’re welcome :)


35 posted on 12/27/2012 9:22:25 AM PST by deweyfrank
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To: Bloody Sam Roberts

Sears.


36 posted on 12/27/2012 9:22:25 AM PST by fatima (Free Hugs Today :))
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To: Fido969
I can’t figure out how they’ve survived as long as they have.

Me either -- they've managed to do it without me since they pissed me off in 1981...glad to see my personal boycott is finally having an effect, LOL!!

37 posted on 12/27/2012 9:22:33 AM PST by T-Bird45 (It feels like the seventies, and it shouldn't.)
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To: Buckeye McFrog
Dead Malls
38 posted on 12/27/2012 9:24:55 AM PST by MinorityRepublican
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To: Gaffer
The last time I was in a Best Buy (a long time ago) I knew exactly what I wanted. My plan was to walk in, lift the box, find a cashier, pay and leave.

The cashier tried to sell me cables. Didn't need 'em.
The cashier tried to sell me a related component. It was on sale! I had one already.
The cashier tried to sell me another component that I didn't want.

I said, "If you try to sell me one more damn thing, I will turn and walk out and you will lose a $1000 sale. Just take my money and let me go."
He said he understood completely. He apologized profusely. Then he tried to sell me the extended warranty.

It was like the "What" scene in Pulp Fiction. He couldn't help himself. He just had to say the one thing he had been told not to say.

I turned and left and haven't been back since.

39 posted on 12/27/2012 9:27:00 AM PST by ClearCase_guy (Republicans have made themselves useless, toothless, and clueless.)
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To: Venturer

I am a huge Lowes fan. I live in the home town of Home Depot but have trouble with finding someone in my local store who 1) knows what I’m looking for or 2) speaks the queens english. Customer service at Lowes is excellent, not so much at HD. Arthur Blank has given Atlanta an awesome football team but his stores have suffered.


40 posted on 12/27/2012 9:27:13 AM PST by rhubarbk (Matt Ryan 2013 Super Bowl MVP)
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To: hoosierham

LOL! I used to call Radio Shack “Computer Shack” as they hadn’t had anything to do with “Radios” in decades. Overpriced, re-branded merchandise and sales help that don’t know diddly.


41 posted on 12/27/2012 9:31:01 AM PST by Minutemen ("It's a Religion of Peace")
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To: al baby

Exactly. I bought Mrs. R2 a laptop for Christmas. I shopped the same thing at Amazon and Best Buy. Same price.

So naturally I bought it at BB. I buy stuff on Amazon all the time, never had a problem, but I’d be leery of paying a thousand bucks for some TV to be sent. I’d rather put my hands on it at the store then buy it and take it home same day.


42 posted on 12/27/2012 9:32:52 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: T-Bird45

You’ve held a grudge since 1981?

Really?

I like you. That takes perserverance and stick-to-it-iveness.

(lolol)


43 posted on 12/27/2012 9:35:55 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: MinorityRepublican

Reading the comments over at WSJ on the story, the consensus seems to be that these four retailers aren’t long for this world. Best Buy gets a good deal of ire. With regard to JCP’s, the commenters generally figure that JCP is outdated, they can’t compete with Macy’, and even though their new store layouts and whatnot are all well and good, the stores are understaffed and it’s a case of “a day late and a dollar short”. Sears is pretty much in liquidation mode, the only thing they have going for them is the Kenmore and Craftsman brands....customer service is awful, when it can be found at least. Radio Shack is useful for finding obscure items, but it’s too much of a niche market to be truly competitive.

Those are so big names in American retail. But most likely, I figure Sears and JCP will go the way of the Montgomery Wards by sometime later next year. Maybe earlier. Radio Shack, maybe. I honestly don’t know enough about Best Buy, as I’ve never shopped there once, so I can’t say.

It’s ironic. Sears and JCP were the Amazon.com of their era. They built their retail empires with their catalogs, and made millions through the US Mail. Someone at both of those retailers sure as hell fell asleep sometime during the 1990s, and now the forces of free enterprises are going to drink their milkshake.


44 posted on 12/27/2012 9:39:40 AM PST by AnAmericanAbroad (It's all bread and circuses for the future prey of the Morlocks.)
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To: Responsibility2nd

I’m Irish and we’ve been holding a grudge against the Brits for 800 years (a non-Muslim World Record, I think...)


45 posted on 12/27/2012 9:40:24 AM PST by Buckeye McFrog
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To: Buckeye McFrog

I remember SM! Also BEST Products. One or the other had a big framed photo of a kindly old couple (the founders) by the checkout - apparently you were supposed to believe it was still a mom & pop store.

By now I hope that people are smart enough to provide false names, information, etc. to retailers.

When ‘customer loyalty’ schemes began in earnest (those barcode cards which retailers view as marketing gold), many users posted/shared their barcodes (which linked to bogus addresses) and encouraged others to copy same. Of course the retailers, who thought they had struck gold in terms of customer data but were simply too cheap and lazy to pay for proper research, reacted with horror and posted all sorts of dire warnings about sharing the barcodes, saying that one’s personal data could be compromised. But if the codes corresponded to bogus data where was the risk? And if the retailers were holding up their end of the privacy bargain where was the risk (again)?

Apparently service, follow-up and loyalty earned rather than demanded are 20th century concepts. When these retail Titanics go down will anyone hold the marketing wizards to account?


46 posted on 12/27/2012 9:40:30 AM PST by relictele
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To: rarestia
They used to warranty everything for life

Hand tools but you go on to complain about power tools.

47 posted on 12/27/2012 9:40:41 AM PST by newzjunkey (bah)
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To: relictele

The photo of the old couple would have been Harry and Mary Zimmerman, who founded Service Merchandise. By all accounts a warm, generous Jewish couple from Nashville.

Unfortunately when they retired their son Raymond took over the business and essentially ran it into the ground. Had the misfortune to meet him once. A real piece of work!


48 posted on 12/27/2012 9:43:32 AM PST by Buckeye McFrog
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To: MinorityRepublican
First of all, if you are going to pay for online news (after Free Republic), the WSJ site is the way to go. Their articles are in-depth and intelligently written by both intelligent and educated people. As a bonus, their Op-Ed section does not tilt to the far-left.

Best Buy provides an absolutely awful shopping experience each and every time I go there (which is fortunately increasingly less often). Virtually nobody who works at the store has any real knowledge of the products they carry there and if they did, they'd move on to a better job. Think about it. If you must shop there however, stay away from the "extended warranties" (which are a scam) and all accessories like cables, chargers and connectors which are horrendously overpriced. If you need any of the latter, go over to monoprice.com and you will get virtually any cable, charger or connector you want at only a fraction of the price. They are priced so cheap at that site that I usually order two of whatever I am buying so I have an extra.

Radio Shack...it is a mystery to me how they are able to stay in business. Whenever I walk into one, I am usually the only customer in the entire store. They stopped making you give your name and address for buying a battery a long time ago but virtually everything in their little stores can be bought on Amazon.com for less money. Their only redeeming factor is they still sell things that you thought were obsolete 20 years ago. So if you need something like an audio cassette recorder or a cheap transistor radio for the beach, that is the place to go for that.

Brick and mortar retail as a whole is a dying industry. In a few years, Amazon.com (and other companies like it) will put vehicles on the road 24/7 that will deliver an order to you in hours or even minutes. So if you are out of toothpaste, there will be a van in your neighborhood that will drop it on your doorstep 15 minutes later. Sounds far-fetched but business plans are being developed right now to do just that. These vans will have access to various "drops" in their area where merchandise of all types will be stored and replenished based on demand in a given area.

Google is working on vehicles that drive themselves. Not so much for people but for these sort of deliveries.

49 posted on 12/27/2012 9:43:48 AM PST by SamAdams76
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To: Fido969

I just bought some fine flannel shirts with pearl buttons at Sears for 18 bucks. An Everlast hoodie sweatshirt for 20. Anywhere else this stuff is 40 to 80 . Their jeans..levi and wrangler. Are cheaper then the Levi stores. Ill be bummed if sears closes.


50 posted on 12/27/2012 9:47:16 AM PST by Blackirish (Forward Comrades!!!!!!!!!)
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