1) The most important criterion for me when looking for a store, is walking distance. I don't want to bike, or drive to the store. So the closest store is almost guaranteed to win my business.
2) The second most important criterion is the price. I'm still a student so I'm a bit careful with my spending. So if a store is much much cheaper, and not too much further, then I might go there when I have big errands to run.
3) I am pretty much insensitive to the layout of the store. I'm already walking 10-15 minutes to get there, so 30 seconds between milk and bread is no problem really
Anyway, my point is that in my case, the reason why the "better" store doesn't win is that I don't really care about the criterion used to define it as "better". So going back to your point, a store doesn't have anything to do to serve my interest other than being close to my apartment and lowering the prices. The rest is almost totally irrelevant to me.
The customer here is the product manufacturers and distributors, and the product is shelf space. In big box and department stores, strategic shelves like end caps and the area near the escalators are paid placements.
Ditto for the supermarket. Ever notice that in different chains, Coke or Pepsi is always either in the front or back of the store across locations? That's because they bid on the preferred location.
Retailers are focusing on stuff like this because most mass retailers have unsustainable business models and aren't making money at the core job - selling stuff to people.
Same thing with Google and TV commercials. For some people, privacy and security and saving time is a better experience, but for most, saving a few dollars here and there is a better experience.
Politicians = It takes time. Once they are elected terms last a long time and then people often have to choose a "new evil"... They can't just say welp, I don't support you anymore that'll solve the problem.
Why isn't it most profitable for the stores to provide the best experience for customers in order to be most profitable?
Suppose there are two stores:
- Store A. Offers decent experience for the customer.
- Store B. Offers much better experience for the customer.
One would naively expect and hope that, given those two choices, more people would prefer to go to the better Store B and hence it would be more profitable. Hence the stores would try to do their best to serve the customer interests.
Why is it instead more optimal for stores not to optimize for the happiness of its customers?
Could it be because customers are not adept at recognizing which stores offer better experience for them, _and rewarding_ such stores by preferring them over other stores?