There’s no doubt about the new shopping culture. It’s very different, and it’s becoming extremely popular. There’s a whole new generation growing up that won’t even remember the shopping rituals of the past. This new culture is likely to reshape society. You can go on an online shopping spree and buy an LCD TV, designer jeans, sporting goods and wine without even bothering to get out of bed. Instead of designing your lunch around your shopping, you can order your shopping from your desk and stroll off to a peaceful meal.

Then there’s the other side of this equation- the ordeal that traditional shopping has become.  A nice browse and walk around your favourite shops is still fun, but getting there is another matter that entails wading through traffic and paying a fortune for parking. The big cities really make you feel every second of travelling, particularly in terms of paying for it. Shopping isn’t as much fun as it was.

Added to the mix is the fact that retail shopping is now a lot more expensive than it was. This is largely the result of high shop rents, but it’s also a reflection of the overheads of retailers. These costs can be crippling, and they’re not getting any cheaper. Traditional retailing has hit a ceiling, and it’s not winning the war against the online retailers either.

The online retailers simply have an infinitely superior business model. They have low overheads, warehouses for their goods, and can discount heavily. They’re far more competitive in terms of prices, even with delivery charges and sales taxes added on. Consumers have got the message, and they like the convenience. It’s really pretty much “Game Over” for the old-style retailers.

Case study- White goods online

White goods are a very unambiguous example of the shift away from traditional retailing. These were the quintessential consumer retailers, with big showrooms, expensive goods and inventories in the millions of dollars. The online white goods retailers have blown them away with discounts. Their overheads are nothing like as high as the big shops. They don’t even need to handle merchandise. They can source it, order it to go direct to the consumer from the supplier, and they’re paying peanuts to sell their goods.

The result shows up very clearly in the prices. The online retailer can sell something like a brand name chef oven, top of the range, and build in a discount at point of sale. For a conventional retailer, this is a truly expensive proposition. Goods take up expensive shelf space, and the best way to keep the cash flow moving is to discount, but it’s done at a cost. For the online retailers, that cost doesn’t even exist. They don’t have to worry about shelf space and they can factor in a profit even at a discount, because of their lack of overheads. The truth is that the old retail methods just can’t compete on any level.

Shopping has been one of the defining facets of all societies for thousands of years. Now it’s changing forever. It’s a change for the better for consumers, both in terms of prices and lifestyle.

Guest Blogger: Sachin

Did you know?

In 1994, the German company Intershop introduced its first online shopping system.

-Tari

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