I spent part of this week at the Shoptalk conference in Las Vegas listening to companies and experts of various ilks discuss the huge changes going on in retail. As you would expect, there was a lot of talk about the way the business has been transformed by the internet.
Even that initial wave of companies that came along with the rise of the World Wide Web in the 1990s is now being pushed by a new generation of retailers who were born in the age of cloud and mobile. The brick-and-mortar retailers have even bigger challenges as the internet—the world's greatest distribution channel—drives further disruption.
Of course, there's Amazon, which hung over the conference like the 800-pound gorilla that it is, but other companies—like Dollar Shave Club bringing the subscription model to razors, Warby Parker allowing us to order eyeglasses far more cheaply on the internet, and Casper offering us a way to buy mattresses online—are having a huge impact too.
As the Casper CEO explained in on-stage interview at Shoptalk, he saw the mattress store experience as ripe for innovation. The idea that you could lie down on a mattress for 30 seconds or so and get a sense of whether you liked it or not was in his view ludicrous. Further, he found the number of choices overwhelming. His company changed that, offering one mattress style available for a 100-day free trial and delivered to your door in days.
Cloud and mobile strike again
Driven by the powerful combination of cloud and mobile, Casper and other companies no longer have to worry about running brick-and-mortar stores. They don't have to beg at the door of big store buyers for shelf/floor space, and they don't have to worry about maintaining expensive inventory. You pull out your phone, order, and they manufacture and deliver it.
All of this change is driven by many factors. The internet and the World Wide Web opened the door. Cloud and mobile made it simple to set up delivery systems. The companies still have to develop great products, but handling ordering, distribution, and delivery has been rendered a fairly simple act.
As one executive put it to me, servers are a lot easier to manage than people, and even more so when they are virtual servers in the cloud that you can add and subtract as needed based on demand.
The big, traditional retailers have certainly recognized what has been happening, and they are doing their best to get creative. But, like so many companies disrupted by the internet, they can't be something they're not.
They are still saddled with legacy hardware, buildings, and inventory—the part and parcel of what it takes to be a physical store—and nothing can change that.
Companies born in the cloud can and do use brick and mortar strategically, opening temporary pop-up stores to drive interest in big population centers. They are more flexible on every level, and most of all they can take advantage of their innate understanding of modern distribution in the cloud to launch these new businesses.
Photo Credit: Ron Miller. Used under CC by 2.0 license.