Tag Archives: overhead

Retail in the Recession – How Ecommerce could Trounce Walmart

This is a response to a great question that I received on one of my posts: 10 Sure as Sun Predictions for the next 20 years in Tech.

I’m posting this for two reasons. One is I think it is a very interesting and important topic for many people, and I feel it could help guide people towards making the right decisions with their businesses in the midst of this recession.

The other reason is I am in Colombia interviewing designers for Beat-Play, but there are so many independent artists out here that we’ve connected with that could benefit from the site, that we decided to host an event to explain the concepts to about 90 bands in the Medellin area..and I am extremely busy!

Reader Question: In your opinion is retail still impacted by recession? January sales looked good, however it seems there is cautious optimism with many retailers in the throes of recession. Wal-Mart has just fired close to 14,000 employees! What is your opinion?

Well I think that ecommerce and online retail will play a huge role in actually leveling out the recession in the future. As organizational tools for consumers get more advanced online, you will see a huge shift in the way retail businesses operate.

Imagine if you want to shop for something, there is one website that you go to. Any and all retail stores can have a page on this site. You go to your profile on that site and it shows you all of your saved stores for your favorite types of products ie: clothes, shoes, computers ect.

If you want to find new stores, new products, or new deals, you type in a couple of keywords. Say in the shoes category, I type in comfortable, running, wide and low cut. Then a page listing all of the stores that sell shoes matching those descriptions will come up. You can sort this page in many different ways, such as the stores closest to you, by price, or consumer ratings. Consumers can leave their own tags, or descriptions of products too, so that other consumers who are looking for similar descriptions can find them more easily.

You can also see where your freinds shop and what products they liked. This site will allow you to compare prices instantly, and also talk to someone in person through video chat, if needed. Consumers would help play a role in marketing. With this system, Walmart would not have as much of an edge in the market.

People very often complain that Walmart’s push little stores out of business, which is very true, because it is a one-stop-shop, and they’re cheaper. With the system I’m talking about, small businesses would not have to pay the overhead for a physical store, just the cost for stock storage. In fact, proximity will have no effect on a person’s store choice anymore, because they are all equally accessable online, plus the local store’s products would deliver to your house that day.

Also, with this system, promotion and advertising would not be necessary. It will exist, but only to distinguish a brand, not to introduce you to one, because with this tag system, if I’m looking for something that you provide, I will find you. These two decreases in cost for a retailer would leave more room for smaller businesses to compete with Walmart on prices. Also customer service will play a larger role in purchase decisions in retail.

The biggest thing people ask me is what about clothes? If I can’t try them on how do I know if they’ll look good? Well there’s some really cool technology out now that uses a customer’s webcam, takes measurements, makes a real 3d model of the person, and then displays the clothes on that person, giving very accurate accounts of how a certain piece of clothing will fit a particular person.

I just wanted to paint this picture for you. The truth is this system is possible, and its’s way more practical than the current one, so I am about 95% certain that it will catch on. This is also an example of how the internet can decrease overhead and increase frequency and reach of a business. I believe that if these effects are spread out across the board, and in many different industries, that it will be enough to stimulate the economy and help jump-start us towards where we want to be. I can see this emerging in the next 5-10 years, and really having an impact within 7-15.

The internet is the solution to 90% of the big problems we face as a society today. The 10% left are caused by people, who just haven’t realized the potential of the internet to really have this positive effect in almost every aspect of our lives. However the internet is young, and I know that there are people like myself developing tools like this right now. People will catch on soon enough. Until then, the most important thing to worry about is quality products, and value to consumers. That’s what will distinguish brands in the future. Hope this helped!

Written by: Dante Cullari Founder & President Beat-Play, LLC

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