Remember when the bubble burst the first time in 2001? Maybe you do, or maybe you don’t but I clearly remember sitting in front of our personal financial adviser and talking about how the internet had changed the face of Wall Street forever, we just didn’t really understand the extent of it yet. Boy was that ever true. Program trading anyone? Hedge funds? Big data? Yes, welcome to the second decade of the new millennium.
Fast forward to last week when I received one of my last Newsweek magazines in hard copy ever. Yep – first published in 1933, Newsweek will be digital only and will cease to be printed starting January 1, 2013; yet another industry that was changed by the internet forever. And wouldn’t you know it – the banner article across the top was The Future of Shopping by Megen McArdle. Retail has been feeling the effects of the internet for years now. This year, U.S. retail online sales are expected to top $224 billion. Like the financial markets of a decade ago, we know that how people shop has changed, but we are only experiencing the tip of the iceberg.
Ten years ago we were all driving our SUVs to big box retailers. Think about where those big boxes are now (the SUVs too!). Many are shuttered, struggling or a lot emptier than they were then. McArdle talks about the impact that cyber shopping has had on the in-store experience. Take show rooming for example. This is the practice of going to a retail store to shop and reviewing the item and then buying from Amazon or another online store. It drives retailers crazy. Why? It’s not just the lost revenue. It is also because the new model fundamentally changes the purpose of the store and its staff and has a huge impact on the retailer’s business model itself. (Commercial realtors beware – there is a downsizing coming your way!)
And Apple, the very company that made smartphones popular, put those sexy little hand held devices in the hands of their floor staff and woke both retailers and consumers up to a new way of transacting a purchase. Now everyone wants to eliminate cash registers, empower their sales colleagues and provide a compelling customer experience.
The internet does change everything. And for retail shopping, the next decade is going to be interesting.
Read our other Holiday Shopping tales.