Flutterby™! : The future of retail 2013-02-25 18:31:29.884777+00

The future of retail

2013-02-25 18:31:29.884777+00 by Dan Lyke 2 comments

Dave Alden's "From Today to TOD - Retail" got some musings from me going, and I'm gonna mirror 'em in the comments here

Even if there comes a time when nylon sintering 3d printers end up in storefronts downtown, it's unlikely that we'll want to wait for those shoes to be printed. Especially when your XBox Kinect can already measure your body more consistently than a tailor, and will probably soon be able to measure your feet better than a barely trained salesperson with a "Brannock device". So my shoe example goes from a problem with stock size back to a situation where the online solution will win on nearly every front.

The U.S. Census bureau publishes quarterly retail e-commerce sales data, and 18 months ago... well... retail e-commerce sales as a percent of total quarterly retail sales seems like it's one of those numbers where six months makes a difference. Looks like we just passed 5.5% seasonally adjusted, and have a fairly clear trend-line.

It's obvious that big-box retailing is the sort of aggregation that only makes sense when the incremental cost of bringing the customer to the store is cheaper than the distribution costs of bringing the store to the customer, and that we get the huge variety of, for instance, produce that we do in supermarkets because the less popular items get distributed over more customers (I can buy tarot root, and fresh turmeric, and... lots of stuff you'll only find in very specific neighborhoods in big city corner groceries).

But thinking about that further, the sort of retail supported by Theatre Square or similar downtown establishments are also primarily car oriented: The last set of shoes I bought, I drove to Santa Rosa to buy because none of the downtown stores had the variety which supported my choice. The next pair I buy will probably come from online, because the downtown store that carries the brand I want tends to only have a limited stock of styles. And it's less hassle to click "buy it" than it is to go downtown.

Would I walk to a neighbor grocery that carried a lot of fresh veggies? Heck yes. Can I see a path whereby the bodega 3 blocks from my house can augment the liquor and snack foods that keep them afloat with fresh spring mix? Hard to get there, given that this time of year it seems like Whole Foods has trouble moving enough product to keep their stock fresh.

Back when transportation was expensive, neighborhoods had food deliveries, the milkman came in the morning and brought all sorts of perishables. I suspect that as the distribution network evolves to make these transactions once again cheaper, and as importantly more convenient, than driving to the store, we'll see this trend return.

So I suspect that the future of retail is largely one of shared public spaces: Yoga studios, coffee shops, restaurants. And barring intrusive rent-control ordinances like those that give Berkeley-ites so much disposable income, or economies of scale and costs of real estate that make it cheaper for Hong Kong residents to eat out than have kitchens, retail spaces will decline.