Tuesday, February 07, 2012

Once upon an industrial economy

Yet another new store has opened in the neighbourhood. It has been crafted with a lot of love. However, the thought of Swami Aiyars recent article stuck in my mind. Are retail stores really the hangovers of the industrial economy?

When you think of it, it does seem to be so. The whole idea of having physical stores is that they are the intermediary from the factory to the consumer. And with the internet, a fair amount of the non-grocery shopping (even in India) can be done off the net. So, as a company, the need to invest in physical retail space where all the customer does is walk in, browse, stand in a queue to buy stuff seems as unreal as having to walk into an airport, check off the flights, pick which flight to fly from and then get your ticket.

When was the last time most of us booked a ticket at a counter? Any ticket? Air, Rail or Bus? Indeed, most movie tickets are also booked online.

So, why grocery? Or books or toys?

In the past couple of years, I have switched to Flipkart. Initially, I thought I would save money by not having to go all the way to a store, end up buying coffee and a book at full MRP. But that has not happened Рnot because of Flipkart prices Рthey are great Рbut because, I have ended up buying more books than I would have if not for flipkart! Be that as it may, do I miss a bookstore? Not one bit. I have specific categories of books I read and many a time, they are not always available Рbut on a website, there is no such problem Рthey source it for you and deliver it free of cost. So, book stores, IMO are pass̩.

Ditto, reservation counters for any mode of transport.

Think about toys now. Most stores give you the same toys, sourced from the same manufacturer – so why go to one store over another – if all you are going to do is buy the same damn thing. Of course, service. But then, if I order off a website that gives me fabulous service without ever having to step out of the house (like Flipkart) – any other promise of service wont make me budge. And whats more I use that time to do other things with the kids. Yes, there will be times, when I wont have a gift at hand to give to the kids friends birthday party – I might need a store. But then, I would always give them vouchers and give them the power of choice. As it is, most birthday parties are a needless exchange of junk (this is filed for a future post). Sure, the kids loses the experience of browsing through and picking what she wants. Oh, well, I can get pretty much the same experience off the net.

Think about clothes. If you know your size, why bother going to a store? Why not buy it online? Indeed, I wish someone sold fabric on the net as well, but that’s a business opportunity I guess.

So, coming back to retail, why open a store? I think there are reasons – if you really really want to open a store, but a generation from now, we may wonder and laugh at the need for stores in the previous generation.

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