The Future of Retail Is Now
In 1998 Wired published an article authored by the now famous Nicholas Negroponte, called The Future of Retail. I recently re-read it to determine how many of the prognostications have actually been realized these eleven years later.
In general it was a vision of consumers, empowered by online shopping options, banding together to systematically sidestep retailers and deal directly with manufacturers and online wholesalers. He suggested that we’d be having so many things delivered to our door that special refrigerated containers would be required outside our homes to hold numerous daily deliveries, including groceries. Negroponte suggested that if retailers were to survive this online onslaught, they would not only have to deliver products but also ensure an outstanding store experience. Even Wal Mart, he noted, would have to raise their game.
Negroponte was almost completely accurate in his forecast. There was only one problem: he was a decade early.
In Negroponte’s defense, in 1998 few could have predicted that North American consumers would continue on what proved to be a twenty-year spending spree fueled by an unprecedented decline in the personal savings rate. In fact, from 1985 to 2008, the rate of personal savings went from its 20 year average of approximately ten percent to less than zero percent. We were buying with absolute abandon and we were doing it with money we didn’t have.
We were increasingly empowered by the internet to make intelligent and responsible purchase decisions but were too busy buying things to bother. We were high on consumption.
What it meant for retailers was a twenty-year “get-out-of-jail free” card. Most didn’t have to be great to be successful. Despite consumer protests about the decline of personal service, big box retail flourished. Regardless of known human rights issues among certain retailers, we willingly funded their growth. Even if we got gouged on price every so often, it wasn’t going to stand between us and the goods we wanted!Continued on the next page