Retail is not dying, it is simply changing.

There are many doom and gloom articles about the pending death of retail. It’s a vastly overstated premise. Much like how Apple and Android disrupted Nokia and Blackberry in the mobile phone industry, Amazon and other e-commerce companies are disrupting traditional brick and mortar retailers. This does not mean that retail is dying, but it does mean some traditional retailers will continue to fade.

Take a look at the retail process of yesterday and it looks very similar to what it is today.

1. A customer goes looking for something that they want. Use to be in a store, now it occurs in a browser.
2. The customer either purchases the item the first place they find it or price matches at competitors.
3. Item is transported to the customer’s final destination. Use to be by the consumer direct, now often through parcel/post.

The retail process is unchanged to what shoppers want, the only difference is that technology has disintermediated the process from where it used to take place. Big box retailers used to have a monopoly on shopper attention and information. If you wanted to purchase a TV you had to go to Wal-Mart or Best Buy to compare them. Now you can go to any number of websites that compare the newest models in depth and even have fairly robust images, videos, and reviews of them. You actually get more information about what you want to buy by NOT going to a brick and mortar store.

For groceries, the brick and mortar store still remains king for now but even that is starting to change. The key differentiator for the grocery store is the ability to guarantee the freshness of hot/baked goods and produce. However, as supply chains further mature and advance even this starts to change. How much further do we need to go before shipping fresh food to a customers front door is more efficient than shipping to the store?

Retail is a great example of the poor of the information age disrupting legacy industries. The fundamentals haven’t really changed once you dig in but it certainly appears to be fundamentally different to the traditional players.