Musing on the future of high street electronic retail. Part I.
There's few things I like musing about more than what comes next for high street retail. Anyone reading Bitterwallet or active on HUKD probably agrees with me that the high street electronics chains are a terminal case without much reason to look into resuscitation options - the recent Best Buy and Comet collapses back that up - so we don't have much to talk about there. Let's move straight to what the future of the high street may look like for electronic retail presuming that big box dies.
The biggest problem for any bricks and mortar retailer is that there isn't an information gap for consumers anymore. You could look at the past decades of high street retail as being an arbitrage of information - the chains knew where to buy goods cheap and the consumer couldn't easily compare the prices and sources for goods. The retailer was able to profit off the consumer not easily knowing whether their pricing was good or poor. On top of the pricing information gap you also had an information gap where the average consumer did not have a reliable source (we're talking large scale adoption of internet) of information on what product was suitable for needs, reviews, and other unbiased advice. So the consumer was really reliant on the high street retailer for product/sector advice as well as honesty in pricing competitively.
Now that information gap is gone and the average consumer is becoming more and more product savvy (they don't need the retailer's help in evaluating a product) and price savvy. This is becoming even more pronounced now that mobile has come of age and we're able to product *and* price check in store.
High street retail has pretty much become a free product showroom for Amazon to sell products. We are already at the point where a consumer can walk into a store, check out the physical product, compare online and buy immediately from an online retailer for delivery today (admittedly only in the major centres aka London). The b&m retailer is supporting that purchase without making a pence from it and Amazon (plus the consumer) is laughing all the way to the eBank.
Oddly, combined with this shift to buying online using the barcode of the physical product we also seem to like buying online to pick up offline… which is the reverse of the above trend. Argos have been issuing profit warnings but it does seem to be the case that many are buying from Argos online to pick up in store - thereby getting the pricing advantages of online with the immediacy of product pickup.
Even when things fall apart in the current high street/big box model there does seem to be value in a physical presence for consumers, whether it's for immediate purchasing gratification or to evaluate physical products. And yet there doesn't seem to be a way to support a physical presence and remain competitive on price. So what could the new models of electronic retailing look like?