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The following article was published in our article directory on August 20, 2012.
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Reflections on the Future of Retail- From an Old Brick and Mortar Guy

Article Category: Advice

Author Name: James F Hughes

Reflections on the Future of Retail- From an Old Brick and Mortar Guy.
Big changes are coming to the retail industry; driven by advancements in the internet: Think of what Netflix did to Blockbuster and multiply by a factor of several thousand! Now I realize that is a strong statement, however, I am a well-positioned prognosticator; I spent 30 some odd years running every kind building with cash registers and now work as an internet marketer. The sea-change that I anticipate is occurring as the old model of manufacturers selling to wholesalers, wholesalers to retailers, and retailers to the final consumer has become obsolete; we don't need the wholesalers or the retailers anymore.
As retail evolved over the past century, stores became increasingly large, with greater variety, and the link between the manufacturer and consumer became more remote with expensive advertising providing the connection. Now, as the full power of the internet becomes more obvious, the direct connection between manufacturer and consumer has re-emerged. As an example, I own a Dell computer. I researched the computer on the internet, shopped on Dellâ's website, and made the purchase without ever seeing the inside of a retail store. This direct to the consumer marketing is much more efficient than the old model, cutting out the middleman and meeting the customer at the point of demand. Additionally, the direct market dramatically lowers the cost to compete while offering a variety that mass retailers, like Wal-Mart, can never duplicate at store level. As a point of reference, a large mass volume retailer like Wal-Mart might carry 150,000 individual stock keeping units in their largest stores while an on-line marketer like Market America carries tens of millions of items. So what does that mean to the brick and mortar retailer? In a word; trouble.
The problem for retailers like Wal-Mart, perhaps especially for Wal-Mart, is their need for sales volume to survive. A very large retail store has hundreds of thousands of dollars in expenses for everything from rent to labor. The only way these stores make money is by selling vast quantities of merchandise, preferably high-margin non-consumables- just the stuff that on-line merchants deliver more efficiently. As the internet erodes sales volume, the stores will struggle to maintain profitability; eventually they will fail. What to do?
Possibly the most sensible approach to the death of the old retail model is to catch the wave of the new paradigm. As an example, just today I set up several on-line stores on my website. Although I will not reach the high gross margins enjoyed by conventional stores, I will enjoy greater variety, a larger customer base, and virtually zero capital investment. All that is required to be successful is a fully optimized website and a well-defined niche market. .

Keywords: On-line marketing; retail

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