Would you ever open up a hardware store? Or a corner grocery, or an electronics store? Would you open the next Radio Shack or Best Buy? I know I wouldn’t. Yet, we’re still all buying hammers, groceries, and cellphones. So what has changed?
The slow decline of traditional retail stores is no secret. Just last month, JCPenney closed 140 locations. Everyone from Walmart to Barnes & Noble are struggling against the encroachment of internet giants such as Amazon. It’s even become a topic in the mainstream press; the New York Times has run two articles about it in their Sunday Businesses section in the past month (this and this). The message seems quite clear — retail’s death is accelerating, and e-commerce will reign supreme
However, things are not quite this simple. Amazon has recently begun opening traditional, physical bookstores, and has plans to open up showrooms for luxury items, as well as supermarkets. It’s a twist worthy of M. Night Shamalyan.
Amazon Go. One company is thinking ahead.
One reason they may do this is because consumers seem to like the physical experience of going to a brick-and-mortar shop. Malls, outdoor markets, and showrooms offer something that even a virtual reality store of the future may not be able to offer—the ability to use all of our senses to make a decision on a purchase.
I am not suggesting for a moment that retail will remain a strong sector of the consumer economy. It will not. Many retail outlets, particularly department stores as they exist now, will probably disappear entirely. However, what I do suggest is that retail will not disappear. It will, like many things in the economy of the future, become niche. I look forward every year to the Auto Show in New York. It’s exciting, flashy, and engrossing. And I don’t even really like cars. When I’m in a mall, the first thing I will do is walk into whatever store has new phones on display. I have a hard time believing the internet or virtual reality would be able to replace that sensation. However, this is something akin to going to Six Flags—you do it for fun, and you don’t do it often.
When a business ceases to become a necessity, it must innovate to stay afloat. It’s high time retail companies and even small businesses realize this, because if they don’t, they’ll lose out to the Amazons of the world, and we’ll lose the wonderful commercial diversity we enjoy today.