Monthly Archives: July 2011

Retail Ain’t Dead

This year we have seen the death of 2 large brick and mortar stores, Blockbuster and Borders. Is this the end of retail? Will we see other stores close their doors because of the disruptive power of the internet?

The trend that we’re seeing today is tied to the type of product these two companies were selling. What did these two companies sell? They sold content. They did not have the foresight or maybe they didn’t believe that the virtual would take hold. Whatever the case may be, they didn’t understand that making things easier for customers was going to prevail. Would you rather go to a store and look for a book that may or may not be there or log onto a web page and order it from one of their many warehouses?

What’s so special about content? Why is it’s distribution so susceptible to the internet? The answer is that it’s fluid. Information in general is fluid. It can come in the form of sounds, images or symbols. The web already gives us a very efficient medium to transmit this information to millions. This doesn’t mean that people wont buy books. What these internet content companies have done is create a portal that displays information on the availability of the content AND at the same time allowing you to obtain that content immediately if that’s what you want.

You can expect content to continue this trend. Music, thanks to iTunes has already been shifted to the internet. News is still fighting it’s way into the web but it will surely have to accept its fate. Currently, the biggest fight is occurring in the movie space. Netflix and others are fighting an uphill battle against movie studies to license their content. But no matter how hard these content companies fight, they will be on the web and they will make money while doing it. Netflix will help monetize the industry just as iTunes monetizes the music industry.

Again, does this mean retail will be gone? As I mentioned, content is just easier to sell on the web. But will all content sellers be on the web? No. I do not envision movie theaters, opera houses, boutique content shops, music concerts and things of that sort going away. Why? These places add something special to the content. In the case of movie theaters, opera houses and concerts, there is a social element added. You are sharing an experience with strangers that share your interests. There’s something to be said about that. In the case of boutique content shops, they might have some nostalgic connection or they offer something that you can’t get on the web.

Advertisements