I have been thinking about the idea of late that shopping is going to die out. Retail seems to be migrating to the internet, with large amounts of people ordering goods online instead of browsing in shops for items. You can get most items you want, cheaper and easier online than in “real world” shops. The UK/Ireland-based Borders Books has gone into administration with one commentator claiming "This is probably the first big retailer to be killed off by the internet."
People seem to love real world shopping and I can’t ever see it dying out entirely but then competition from online retail might make most current retail businesses unprofitable. **I suppose in this thread I want to debate what shopping will be like in the future, say in the next fifty years, how it will change, and realistically what a shopping mall (if they still exist) would consist of in 2060. **
Change in shopping is of course nothing new. New technologies, prosperity make certain professions, services and items less desirable. Most suburban malls don’t have blacksmiths for example .
Hopefully this is not an excessive hijack, but Borders Group Inc, the parent of Borders UK (as well as Borders Books & Music (US), Waldenbooks (US) and Books, etc (UK) ) is based in Ann Arbor, Michigan.
Borders over the years made many attempts to integrate online shopping but they just basically missed the boat on 4 or 5 different occasions and never came close to innovation needed to become a market leader. For example, customers were asking for “in store pickup” in 1997 – I think they finally rolled it out around 2006.
BTW, My first job out of college was for Borders Online, and I worked on internet-related aspects of the business for 8 years at the Ann Arbor HQ.
Oh I knew It was originally a US company, I was saying it was locally based to distinguish this part (which parted ways with the US Borders in 2007) from the American one, if ya get me. Thanks for your comment and it isn’t hijackory at all.
Ultimately though if a company goes heavily into online it will presumably be to the detriment of its physical retail units. It might well make the company more profitable but it might cease to become a trader with a presence on high streets or in malls after a time.
The very thought of just sitting in the house pushing buttons to bring crap right to my door brings on depression. It’s a useful option to order online, but it will NEVER replace actually getting up and going out to hunt and gather.
Certain things like CDs I will buy online, as it’s way easier. But for clothes I still like to see them and try them on. Even if it’s a pair of 501 blue jeans, that I know the size for, I still like to try it on.
For computer parts and the like, you can’t beat the online deals. I often go to MicroComputers and look at items to make sure then I go online and order it much cheaper
With the margins that stores tack on, how can they NOT be profitable? Really? Maybe in the future the cost of commercial real estate will drop and things will balance out. They’ve lived on unrealistic margins this whole time, and perhaps it’s an adjustment period.
Books strike me as something that people don’t necessarily need to see and feel to decide if they want. Other items vary. Lot’s of people still want to see and touch the product before they buy it.
The company I work for started out entirely online selling electronics, computers and computer parts. They eventually spread out into other areas and opened a small retail division. Now with nine stores the retail out preforms the online. Go figure. I think the nature of the goods you offer has a lot to do with that.
For years now there’s also been an issue with people looking at items in local stores and after deciding what they want they shop online for a better price or to avoid taxes. I think that playing field needs to be evened a bit.
I don’t think the likes of Wallmart is going anywhere. I’m thinking more of smaller, more ordinary stores. The standard markup is 40%, no?
But maybe we can indeed imagine a future very much like the one imagined 130 years ago in the book Looking Forward. You don’t have stores, but showrooms. After you pick out what you want, it’s mailed to you anyway. The manufacturers would be the ones paying to have their wares displayed (although I’m afraid the showroom owners would try to screw the manufacturers out of too much money.)
The margin on books is only about 15%. Bestsellers at 40% off are selling at a substantial loss. Sometimes the publisher kicks in with a temporary “shared markdown” but that doesn’t actually create a profit… just less loss.
It depends on the item. Profit margin varies from item to item and has to cover a lot of overhead. Companies have to sell a certain amount at cost or below or get stuck with it. You make your profit where you can according to supply and demand. If you have a 40% mark up on some items or even get to double your money or more on a few things it doesn’t mean you’re making 40% profit on everything. Far from it usually.
Oh, I disagree about buying books online. I certainly do buy books online, and my husband found it very easy to order from my wishlist, but nothing compares to browsing in a bookstore and picking up something that catches the eye and reading a few random pages. And shopping online can’t provide that bookstore smell, which is one part of the experience for me.
I buy the majority of my clothes online. Usually I’m happy with them, but in some cases, a garment that looked great online has a lousy hand feel, and the workmanship is exceptionally shoddy. Those are qualities that can’t be determined onlline.
If you are buying online why would you buy CDs at all? I stopped buying CDs completely years ago. It seems to me that the only reason CDs and paper books are still sold is out of a sense of nostalgia, that will not be shared by coming generations. Physical media is obsolete.
Yes, online is the only way to go for computer parts.
Cosmosdan New York now charges sales tax for online purchases.
Some “Brick and Click” retailers have done a decent job integrating both. Target, WalMart and BestBuy are three examples of companies with successful Brick and Click operations - their brick stores aren’t going anywhere and are a necessary part of the model.
Other “Brick and Click” retailers shut down their brick stores - which are more expensive to run - in favor of the more profitable click model. Often this is done out of necessity - Circuit City still has an online presence, but only because that was the part that was resurrected from the dead.
Then there are pure play Click retailers - Amazon being the biggest of course.
I think we’ve already seen the single largest change, or at least the beginning of it, that online shopping will bring to the bricks and mortar retail industry; the dominance of big box stores. Larger stores are more time efficient and convenient than small ones; it’s still vastly more convenient and cheap for me to drive to Walmart to pick up the stuff they sell than it is, or probably will ever be, to order it online.
The way I see it, the goods that are more conveniently purchased online are those that are
Not cheap, and
Not important to try before you buy.
High end stuff like, say, Williams-Sonoma’s wildly expensive kitchen stuff is a logical choice for online shopping. So are CDs and movies (which of course have the added benefit of being electronically deliverable.)
The bricks and mortar business will still have to deliver cheap stuff - a $5 shirt for my kid simply isn’t worth shipping - and big stuff that people want to try before they buy, like cars.
Although one of the advantages high end brick retailers have is that - at least around here - they cater to leisure shoppers. Sometimes I go out to lunch at the Edina Galleria - a mall with a Williams Sonoma, a Coach store, a Tiffanys, a Smith and Hawken - you get the idea - plus a lot of small independent high end retailer. And the mall is filled with well dressed women out for lunch and shopping for entertainment in groups of two and three. If they see a Coach purse they like, they will buy it - they won’t go browsing on the internet to buy it because its an impulse purchase.
If you need something, and you don’t need it now, having it dropped by your house is convenient. If you need something and you need it now, you’ll be running to the store. If you don’t need anything at all and are looking for something to do, wandering around the mall buying stuff is something to do.
Your view on that is based on nostalgia. Books are already being replaced en masse. There IS a replacement for books, and likely your kids won’t share your sentimentality.
One thing not mentioned is that 50 years from now we will have 3-d displays (if not holographic displays) so those who shop on-line will have the ability to look at all sides of a product. We might have tactile displays which will help with clothes and fabric shopping. I think we might also have models of our bodies stored, and so will be able to virtually try on some things, with heuristics that will tell you the fit. 50 years is a long time in this business. We might have VR shopping malls also.
I agree that stores selling food and relatively cheap things will still be open. There will indeed be stores that cater to shopping as recreation, which, let’s face it, accounts for probably most mall traffic outside of Christmas season. They are going to have a much nicer environment than most stores today, and the markup they charge will be accepted as the price of the experience.
Aside from this, prices will converge, with a few stores that can exist still charging the on-line price plus shipping. I assume all state governments will figure out how to charge sales tax for all on-line purchases by then. 20 years ago I ran from store to store looking to see if they had something I wanted and comparing prices, now I can check on-line first (even if I want it now) and when I get my Droid phone I can read the barcode on something that looks cool to see where the best price is. I do this today with catalogs. If I see something I want to get as a present, I immediately do a search for it and order it from the cheapest place.
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