We live in a heavily over retailed environment. We have a massive amount of real estate dedicated to consumerism. The question posed in a
story today in the Wall Street Journal is an interesting one. As we shift more of our shopping online, what happens to our world, which resembles one massive shopping mall?
The Shift in Shopping
The fact is, we're forever changing the way we shop. We've had a discontinuous innovation in shopping. Online shopping gave us the ability to gather information, check opinions, compare features and find the best prices faster and more efficiently. Even if we go into a store to actually purchase, we go in armed with information that leads us directly to one item. We know more about what we're buying than the staff working in the store and we often have information in hand, printed from the web.
The entire strategy behind retail locations is quickly becoming irrelevant. The concept of the huge store that would surround us with compelling suggestions to buy is becoming less effective as we spend less time physically browsing and more time doing it virtually. The massive investment in the "consumer experience" is paying back fewer and fewer returns. This fact became painfully obvious when you look at the long list of retailed who were rocked by the recession. The news stories blamed the economy, but again, like so many things, the blame has to rest with our changing habits and behaviors. We just don't shop like we used to.
Taking It to the Streets
And if the desktop rocked our very notion of shopping, there's another, even bigger shift coming. Mobile computing, with it's ability to know where we are and even (through digital cameras) what we're looking at, will blow our previous concept of shopping into non existence. Our handheld devices will link virtual stores and the physical ones we're in. There's an iPhone app called
Red Laser. It let's you scan UPC bar codes and then searches online destinations (at this point, just a few) to find the best price. As we speak, developers are working to tie that in with a shopping engine like
Milo.com, which taps directly into the real time inventories of stores near you to bring back the best prices. We're literally weeks away from the ability to scan, send, retrieve and shop. While you sip a tall Chai Tea Latte, you could browse hundreds of locations in a 5 mile radius AND check out the best prices online. Can you feel the shopping malls crumbling around you?
RedLaser 2.0: Realtime iPhone UPC barcode scanning
Every time I bring up a discontinuous innovation fueled by technology, there are inevitably protests from those who desperately hold on to the tangible and experiential aspects of our lives. "We love shopping too much!" they protest. "The shopping mall will never die!" True..some of us love shopping too much to relegate it to an online search. But some of us don't. A lot of us don't. And when you think about the massive investment in shopping that's been made by retailers, you require a huge critical mass of shoppers to keep it going. The tide has shifted and it will wash away retailing as we know it.
The Shift in B2B
In my book,
The BuyerSphere Project, I talked about something very similar happening in the B2B world. In our research, we found that approximately 60% of business buyers who buy regularly purchased items (toner cartridges, copy paper, office supplies, etc) would prefer to do so online. Yet, the physical infrastructure of the companies who sell these items still supports shopping methods that are rapidly dwindling in popularity - especially physical brick and mortar locations. When the C Suite talks about budget allocations, a huge percentage goes towards supporting these legacy outlets and a relatively tiny budget goes to the online channels. Our corporate priorities are totally screwed up, as the gap between how we do business and how our customers shop gets wider and wider.
It's not going to be pretty for retailers as they adjust to this new reality. They are just emerging from an economic gut punch and now they have to think about reinventing how they do business. I have no idea what the store of the future will look like. Perhaps more like the Sears catalog store of my childhood. All it was was a counter with a warehouse behind. You simply walked in and picked up your order. In those days, in rural Alberta, you did your shopping in the catalog. Funny, how everything old suddenly becomes new again.