Today I often read about how internet retail is going to destroy the high street and the shopping malls of America. In fact, the headlines are very similar to what was said about how the malls were going to do to the high street shops in the 80’s.
In my travels around America almost every high street, mall and strip mall have exactly the same shops with the same products. Now, this is good in some ways...I can walk into a CVS in my home town or in any other town and be confident that I will get close to the same products and prices.
This strength is also a great weakness. These same ‘national’ chains have pushed out retail innovation so much that there is nothing left for the specialist shops where one can buy a more unique product that makes everyone a little different and ‘special’. The shopping experience, in general, is unimaginative and mundane.
If I want to buy basic products like toothpaste, razors, cleaning fluid, washing powder etc etc I want to be able to do it on line. I don’t want to have waste my valuable time going out to buy such day to day products. I want to get out my phone or computer and order them in a few minutes.
So I am delighted when I read about Amazon killing todays retailers. I want them all wiped out as soon as possible!
So lets just imagine my wish comes true...what happens then? The opportunity for local, specialist retailers comes back to life again. Because of the reducerd demand for retail space rents will fall. Furthermore, the very infrastructure that allows Amazon and large organizations to be so cost effective will also allow the smaller retailer to be more innovative and still make products available for a reasonable price. They can get basic supplies cheaply and on-line. Products can made cheaply overseas even for smaller quantities. Creative work is also available via online services.
For example you don’t need to have huge capital investment to make specialist line of clothing is was so in the past. Yes, what is made wont be as cheap as the basic clothes available on line but they will be more unique and, I am predicting, more in demand precisely for their uniqueness.
The same is applicable, but perhaps not to the same extent, with food. I predict that, over time, with the development of the online experience of purchasing basic food supplies, the standard, lower end supermarkets will have no way to make a profit. As a result the the large household brands of today will have no choice but to go solely on line. Their future is all about differentiation through advertising and brand recognition...that is all. But this change will give an opportunity for local specialist food sellers bakers, butchers etc etc. They will use local products wherever possible and have a limited supply, but they will know their products inside out and the service will be individual and face to face.
Does all this sound familiar? Like the retail high street of the past? Lets be clear I am not lamenting the past and wishing for a return. I am actually looking for a high street to be rid of the common products and be focused more on the unique and artisan...where we can go and spend time in shops to explore and discover rather than get in and out as fast as possible.
I look forward to these days ahead...perhaps some time away but I feel confident they are coming!