Dude is on some Silicone Valley drugs...
Op-Ed | The Future of Retail is the End of Wholesale
BY DOUG STEPHENS 5 FEBRUARY, 2015
E-commerce will rapidly reshape the entire economic model of retail, spelling the end of wholesale, argues Doug Stephens, founder of Retail Prophet.
TORONTO, Canada — Retail is facing a monumental problem that no one seems to want to talk about. It’s that the entire economic model of revenue and profitability for retailers and the suppliers they do business with is collapsing under its own weight and soon will no longer function.
Part of the problem stems from the continued pervasiveness of online retail. Global e-commerce increased by 19 percent in 2013 alone, a figure that was likely equalled or bettered in 2014. With those sorts of multiples, it’s entirely likely that upwards of 30 percent or more of the total retail economy will be transacted online by 2025.
Our dependence on stores to serve as distribution points for products is rapidly diminishing as digital media, in all forms, becomes remarkably effective at serving our basic shopping and distribution needs which, until recently, could only be fulfilled by physical stores. Now, just about anything we buy can be on our doorstep in a matter of days, if not hours, via a myriad of online shopping options.
The physical store has the potential to be the most powerful and effective form of media available to a brand.
The End of Wholesale
This historic transition raises a few critical questions: How can the financial models for retail revenue and profit, which haven’t changed significantly since the industrial revolution, sustain if the core purpose and definition of a “retail store” itself is being completely reinvented? How can retailers continue to buy products in mass quantity at wholesale, ship them, inventory them, merchandise them, train their staff on them, manage them and attempt to sell them, when the consumer has a growing myriad of options, channels and brands through which to buy those very same products? How many of today’s retailers will simply stand by and watch an ever-increasing percentage of their sales cleave off to an expanding mosaic of online competitors — which, by the way, may include many of their own suppliers who are now selling direct to consumers?
It seems inevitable that retailers will have to define a new model; one better suited to the fragmented market they find themselves in...
Continue on BoF
Op-Ed | The Future of Retail is the End of Wholesale
BY DOUG STEPHENS 5 FEBRUARY, 2015
E-commerce will rapidly reshape the entire economic model of retail, spelling the end of wholesale, argues Doug Stephens, founder of Retail Prophet.
TORONTO, Canada — Retail is facing a monumental problem that no one seems to want to talk about. It’s that the entire economic model of revenue and profitability for retailers and the suppliers they do business with is collapsing under its own weight and soon will no longer function.
Part of the problem stems from the continued pervasiveness of online retail. Global e-commerce increased by 19 percent in 2013 alone, a figure that was likely equalled or bettered in 2014. With those sorts of multiples, it’s entirely likely that upwards of 30 percent or more of the total retail economy will be transacted online by 2025.
Our dependence on stores to serve as distribution points for products is rapidly diminishing as digital media, in all forms, becomes remarkably effective at serving our basic shopping and distribution needs which, until recently, could only be fulfilled by physical stores. Now, just about anything we buy can be on our doorstep in a matter of days, if not hours, via a myriad of online shopping options.
The physical store has the potential to be the most powerful and effective form of media available to a brand.
The End of Wholesale
This historic transition raises a few critical questions: How can the financial models for retail revenue and profit, which haven’t changed significantly since the industrial revolution, sustain if the core purpose and definition of a “retail store” itself is being completely reinvented? How can retailers continue to buy products in mass quantity at wholesale, ship them, inventory them, merchandise them, train their staff on them, manage them and attempt to sell them, when the consumer has a growing myriad of options, channels and brands through which to buy those very same products? How many of today’s retailers will simply stand by and watch an ever-increasing percentage of their sales cleave off to an expanding mosaic of online competitors — which, by the way, may include many of their own suppliers who are now selling direct to consumers?
It seems inevitable that retailers will have to define a new model; one better suited to the fragmented market they find themselves in...
Continue on BoF
Comment