This week, Borders Group Inc. filed for bankruptcy, forcing the large bookstore chain to close a third of its outlets across the US.
With the emergence of eBooks, more and more readers are downloading books to read on electronic devices; and thus, closing the chapter on conventional book distribution.
Similarly, many Blockbuster video rental outlets are being pushed out by their landlords, while also dodging bills from some of the film production companies that supply their DVDs.
With online rental video services (Netflix), DVD kiosks (Redbox) and online video streaming (Hulu, etc.), there is no need for consumers to physically visit a rental video store only to pay higher prices for the same movies. Slowly but surely, the internet is revolutionizing the media retail landscape in ways that industry leaders had failed to predict before it was too late.
Tomorrow’s generation will experience a world much different from our own, where leaving your house during the weekend will become more of a choice and less of a necessity.
Already, consumers have begun doing their groceries (Peapod), buying everything from bed sheets to electronics (Overstock), shopping for cars (Cars.com), and even real estate (Zillow) online. Of course, nothing beats the retail experience, right? We enjoy the chance to actually touch, feel and smell our groceries or maybe try on our clothing first.
Yet, when compared to the ability to compare prices, create taste preferences, and even bookmark items to purchase later, will the visceral experience be enough to combat the growing tide of online retail? Furthermore, in today’s world, many consumers are able to enjoy both! You can drive a Cadillac today, and then, buy it online tomorrow.
Or try on a dress to learn your size, only to pull out your smartphone and buy it through the company’s website. Yet, how much longer will the retail outlets be able to rely on consumers to pay their higher costs due to rent, staffing, maintenance, etc.?
In the cases of Borders and Blockbuster, the answer is not as long as they had hoped. However, many other businesses are safe for now. The experience of receiving media- newspapers, magazines, books, TV and movies- is largely the same whether online or not.
Yet there is no easy replacement for the immediate gratification of impulse shopping. Nevertheless, humans are largely creatures of habit. While today you may feel that impulse to buy while walking by a store window, tomorrow the next generation will be able to buy their favorite athlete’s sneakers or their favorite actress’s earrings with a click of the mouse. Therefore, wherever retailers can find consumers who are both familiar with the web, yet still unaccustomed to shopping malls and retail outlets, there may already be a market where online retailers could dominate the landscape.
Our generation has spent our lives envisioning the development of the third world. Awaiting the day when walking through Calcutta or Mogadishu will be difficult to discern from New York City or Tokyo.
Yet already, it is safe to assume that the future for all of us won’t include newsstands, bookstores, and movie rental shops; possibly libraries, and movie theaters as well. Therefore, is it that much more difficult to imagine a future without shopping malls, grocery stores, and car dealerships? With all of the high investment costs of construction, distribution networks, marketing/advertising, and staffing, why wouldn’t future retailers in the third world build their clientele online first, and construct shops later?
The internet will also provide an outlet for marginalized clothing designers to market and sell their clothing to specific markets; possibly even creating custom clothing, where the consumer participates in the design. Before we know it, entrepreneurs from the least likely corners of the world can become leaders in innovation and revolutionize multi-billion dollar worldwide industries!
In the past 20 years, the mobile telephone has already leapfrogged the land line telephone; and I believe that in some countries, the laptop has already begun to leapfrog magazines, and television sets. Leapfrogging begins with one consumer who becomes acclimated with latest technology, without having to suffer the restraints of its predecessors. Similarly, businesses are then able to provide quality services without making the same investments as yesterday’s industry leaders.
In short, I hope that the experiences of Borders and Blockbuster serve as a wake-up call to us all; both the retail business leaders of today and the entrepreneurs of tomorrow. The internet is not only bridging the gap between small businesses and global retail chains, but also between the first and third world. Get ready to see the modern world change as we know it! And get ready to see the under developed world transform in ways we never imagined!