Posted by: nickgerlich | October 16, 2007

Less Is More

There is no shortage of shopping opportunity in Las Vegas. As I wrote yesterday, there is an enormous lifestyle center about to open on the south end of the Strip. The Venetian and Planet Hollywood casinos have recently added many more stores. And there’s yet another large lifestyle center in the works for the northwest side of town.

But one thing I have observed through the years here is that whenever you shop along the Strip, in those swank casino-malls, don’t be surprised if you see Gerlich’s Second Law of Retailing at play. To wit: The price of a retailer’s merchandise is inversely proportional to the amount of merchandise on display.

Closely related is Gerlich’s Corollary: As the amount of space between products on display increases, so does the price.

Forum ShopsAs a veteran Retailing instructor (and I am somewhat saddened that I will not be teaching this course for a while, since I am moving into a semi-administrative job this spring), I always have my eyes (and camera lens) open for examples to share. I see the world through different eyes, ever analyzing merchandising, end caps, pricing, and the like.

And so once again we found ourselves strolling the Appian Way…er, the Forum Shops at Caesar’s Palace, where I recognized about every fifth store. The rest belonged to obscure designers that I am either too uncool to know about, or are still trying to burst onto the scene.

This is not your janitor’s shopping mall. No siree, you almost have to flash a platinum card just to cross the threshhold into these shops. And the space in between garments on the shelves and racks screamed inefficiency…at last from my more modest mass-merchandising mindset.

About the only stores we visit there are FAO Schwarz (where my kids acted like…well, you know…kids in a toystore), the Houdini Magic Shop (kid country once again), and the Sony Style store (ahem, Dad’s Reward).

And the rest of the place was filled with shops staffed by bored clerks wondering when the next customer might show up. When men’s dress shirts are $150, and ladies shoes are $600, you don’t find mobs of shoppers fighting over things. Even Brooks Brothers, with their Buy-1-Suit-Get-$400-Off-The-Second wasn’t exactly busy.

Of course, you could argue that you really do not need to make too many sales each day to pay the rent and wages. And you would be right. But sometimes it just looks a little too spartan in those shops. I almost wanted to go in and rearange the merchandise, getting rid of all that vacant linear footage between sweaters and shirts. What a waste. And what a place for dust to settle.

I remember shopping in the Bellagio a few years ago with a former colleague. He very nearly bought a $1200 dress for his wife back home, until he realized he would be paying not only for the dress, but also the 6 inches of empty space either side of it that could have been generating retail sales had there actually been something there. He skipped the dress, and we went to see CSN&Y instead. Money well spent.

Perhaps I betray my humble economic ways by even making light of such retail snobbery. Maybe I show my lack of taste in not recognizing all those designer names. Or maybe that just leaves more money to spend on my Sony addiction.

And this doesn’t even begin to address my fascination with Apple. We’ll get to the core of that tomorrow.

Dr “Outlet Malls Are Good Enough For Me” Gerlich

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