Some strange and fantastic things are happening in the world of retail entrepreneurship. Granted, I'm the last person who should be testifying to what's new and interesting in any part of retail, what with generally treating store visits as guerilla expeditions -- in, get something, out -- but this is different.
Here is why. What is happening is next-generation retail, the combination of changing ideas of money, location, service, distribution and shopping. In other words, pretty much everything that constitutes The Experience Formerly Known As Retailing (TEFKAR) is in wicked flux.
Let's start with shopping itself. Hands up everyone who hasn't bought anything online in the last year. I'm assuming there are none of you, or at least that's what the latest data suggest. On the order of 160 million people in the U.S. bought something online in 2010. Considering that the adult population of the U.S. is roughly 200 million people, it means better than three-quarters of people buy online in any year -- and that goes to almost 100 percent if you consider people "web-influenced" in a purchase. (And how you could avoid being web-influenced in 2012 is more or less beyond me.)
Now let's turn to what we buy. It all started more than a decade ago now with books and music, but online buying has changed immensely since then. Almost every product (and service) category that was deemed never-ever is now being bought online, from pet food, to shoes, to building materials. There is, it increasingly seems, nothing that can be sold that can't be bought without going into a store. Even the three bastions of physical store hegemony are finally teetering, at least a little, as grocery stores, auto parts and home improvement finally see big growth from startups and incumbents alike. As a result, total retail real estate in the U.S. has flat-lined and is unlikely to change any time soon, which isn't a bad thing.
But the transformation of retail doesn't stop with real estate and books. If it did, this might just be another Isn't Amazon Cool? story, which it is, but a) it is not news, and b) it isn't all that interesting. Instead, what's happened is a reconfiguration of what and how we sell. Sure, things are being bought and sold through websites, but that's only the beginning. The rise of mobile in the last five years has been astonishing, with more people purchasing things online via mobile phones in the last year than bought via the web as recently as 2004. It's astonishing, and it will continue, with it very likely the case that most purchasing will eventually happen via mobile, perhaps as soon as 2020.
Let's keep going though, because even mobile is well understood. What's also happening is that the ways in which products and services are sliced and sold are changing, aided and abetted by online technology. Look at how curation is changing selling, with services like Fab.com introducing the idea of a carefully honed list of products being presented to people at attractive prices on a daily basis from a host of providers. The numbers are outstanding, making Fab.com a breakout retail hit as people rely more and more on curation to cut through clutter. And even you and I can get into the curation-as-retail act, with services like Quarterly.co emerging, which allow you to subscribe to a curated list of things that your friends think you might like to purchase. It turns everyone into storeowners, on a subscription basis.
You can't forgot all the many flash sale and discounting services, of course, even if those seem increasingly cluttered and noisy. That said, Groupon and its ilk are doing big business, and discounting, coupons and flash sales are now part of accepted retail, and they won't go away, even if some of the providers of such services may not be around in the long run to benefit. We are even seeing such flash sales move to many other categories, like hotels, via services like HotelsNow, that had long been holdouts to last-minute deals.
The innovation in retail entrepreneurship just won't quit right now. Consider the case of recently launched 99Dresses, which lets you, as a woman, swap dresses with others with similar interests and a similar size. Instead of wondering why you have so much clothes and so little to wear, you can now use your clothing as currency, constantly exchanging with others having your interests -- and without buying anything new.
Speaking of currency, that is the last retail frontier right now. And it's changing too. We are finally seeing a radical rethinking of how we pay for things, with iPhones acting as Starbucks cards, but much more broadly than that, with the entire notion of payments, credit, cards, etc., all in flux. Some of the hottest startups in Silicon Valley right now, from Boku to Payvment, are in the business of changing how we pay. We will soon be seeing a complete overhaul of payments, with the result as radical as anything that happened to bookstore and music a decade ago.
Welcome to Retail 2.0, a radical reinvention of the business of selling. It's only just beginning.
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