Take a good look around you. Have you noticed anything different in the retail section of your city? In many cases we are seeing a significant rise in store closures. Certainly the economy has done a number on existing retail outlets.
I absolutely believe the economic crisis that began in late 2007 will be marked as the single largest shareholder to the view of ecommerce as the preferred method to sell merchandise.
Many of the businesses that are shuttering stores may be reorganizing with a concentrated focus on online sales.
What does ecommerce offer the business owner?
* No need for a storefront.
* No need for sales associates.
* No need for building and liability insurance.
* No need for heating and cooling.
* No need for sales training.
* No need for expensive computer infrastructure for each store.
* No need for a cart roundup.
* No need to work at covering shifts.
But it also offers value to the consumer.
* An online visual catalog.
* Full company contact.
* No waiting in line.
* Immediate customer response through autoresponders.
* Delivery to the customer's door.
* Twenty-four hour shopping.
* Accessible content to help customers understand the products better.
* Value added memberships that may include additional content, free shipping or access to a member's only forum.
Honestly we are seeing many business owners asking themselves, "Why do I need a storefront anymore?" In equal honestly I have to suggest it may not be a requirement to do business in the 21st century.
It can be disappointing to see the many shuttered buildings, but the shift is near seismic in scope. Many businesses started out using a web store as a means of garnering additional business. The shift happens when these business owners see their website outperforming retail shops that cost considerably more to run. Some stores are seeing less than 20% of their annual income through their retail outlets while more than 80% is happening online.
At some point the question strikes a cord with those paying close attention to the bottom line, "Why keep the store open."
My prediction is that many former retail shops may be converted to product fulfillment centers for online business. They may feature a front office where phone calls are managed, but the bulk of these former shops will be dedicated to housing products and fulfilling incoming orders. This dynamic can be as true in a town with fewer than 2,000 residents as it is about a city with more than 100,000.
Obviously there will be a continued need for restaurants, grocery stores and other essential needs in a community, but for those businesses that may be aimed at discretionary money you may well see those shops moving more and more to an online world.
Many will claim this as a win-win scenario for both business owners as well as consumers. I believe it will pose unique challenges for municipalities that may need to structure how they promote and refill their retail district. If viewed correctly this could mean unique new opportunities, but it will require an alteration in how you think about the empty buildings.
The times – they are a changin '. Welcome to an era of extreme adaptation.