For years, brick and mortar shops have been the golden standard of retail. You go in, buy something, then head home. From clothes, to food to home care.
Amazon was created with the sole purpose of taking retail online. Beginning first with books, they have made a good start at taking huge chunks of retail business online, and in doing so have created a huge supply chain and logistics business, perhaps one of the most efficient warehouse and delivery businesses out there.
More recently though, we’ve seen a second wave of this pattern. Startups have emerged to dig deeper on certain segments of retail and delivery. Postmates offers on-demand delivery for anything. Companies like HelloFresh and BlueApron take grocery shopping online. Warby Parker and Harry’s have emerged to successfully sell glasses and shaving products almost exclusively online.
As websites have improved, people are better able to understand exactly what is it they are buying online. This reduces the need of having a physical space to go see the product. Hence, simple products like glasses and shaving razors are well suited to online retail. An interesting counter point is more complex products, such as Apple computers, tablets or watch may be more difficult to understand on line, hence Apple’s dedication to retail outlets.
An interesting effect of all this could be the massive reduction of retail outlets in urban areas. As more retail business shifts online your every day cosmetic store and grocery store will go out of business. Large warehouses will sit on the edges of cities with a vast network of distributing and delivery nodes doing the legwork in between.
As we witness the death of brick and mortar we also have an opportunity. Space will open up in the heart of cities and it is not yet clear what will replace them. More coffee shops? Virtual reality areas? New parks? I’m interested to see how city planners and governments approach this opportunity over the coming years. We have an opportunity to redesign our urban areas and reclaim space for creative and productive work, let’s heed it.
- Post-Amazon Retail - Where I discuss Digitally Native Vertical Brands and their role in the retail.