Is Retail Quietly Trending Away From Bricks and Mortar?

Back in the late 90's when e-commerce was coming to the fore and Jeff Bezos (Amazon CEO) was the poster boy for every article and TV piece on the new phenomenon of on-line shopping, a fear pervaded among many retailers that they might be torpedoed by the new shopping medium. Some retailers ignored it or dismissed it, but there was a fair amount of industry talk about people shopping from home in their underwear and how the economic benefits of a rent-free (virtual) address was an unfair advantage that could ravage the industry.

Over time, retailers relaxed and joined the fray by abandoning poorly conceived or rushed web sites, taking e-commerce seriously (bricks and clicks), and developing true web presences. They stood up to competition from mom and pops and Amazon and other big discounters, so it seemed that the panic was over and that they didn't have to worry about closing stores due to Internet competition.

Now, retail is at another inflection point. Amazon is head and shoulders above all other Internet-only competitors, producing its own line of products and services, buying Kiva Systems, and reportedly on track to have nearly 70 warehouse locations in the near future. In addition, the early volleys of tablet wars have begun with an immediate hammer blow to traditional print publishing/advertising and a new era of rich media enabled "catalog shopping" on the horizon. Add to that, the ceaseless growth of smart phones and a youth culture that has an always-on wireless connectivity psyche embedded deep in its soul and once again, bricks and mortar retail is under pressure. This time though, there's more than perception behind the changing merchandising topography. This time, there's less novelty and more early adoption and perceived demand from consumers that are now comfortable with technology as both a lifestyle and beneficial shopping tool.

There's no immediate threat, but over time - possibly a fair amount of time, traditional retail shopping will be permanently affected. It may be largely innocuous like a more intelligent store environment enabled by digital signage, electronic wallets, and retail or brand based apps. Or, it may be the first, real, wholesale change to shopping habits since the emergence of the department store or suburban mall. It's quite possible that retail stores will more and more become in effect, catalog showrooms, customer pick-up windows, and return desks - scenarios they cannot financially sustain.

Clearly there's an experience to in-store shopping that can never be replicated by digital shopping (inclusive of the long anticipated immersive holograms of the future!). There will be no on-line replacement for items like a piping hot mocha cappuccino.  Retail shops are a destination, an escape, a place to touch and feel, a place to be seen by and interact with others, and they offer an immediacy that even young shoppers enjoy. But it's quite possible that in time, store footprints will decrease, that the number of locations large chains possess will diminish significantly, that thin staffs and self-service becomes rampant, and that a number of retailers that are very sound businesses today, will vanish.

Change doesn't always come quickly or painlessly, but in our society, it comes.

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