Retail in 2015 – the commoditization of everything

With 97% of internet users now researching online (http://tinyurl.com/ygkdoc6  ) and most deciding what they want before even hitting the stores, there are two deciding purchase factors at play;

Convenience vs. Price.

I will buy a cell phone charger today for $40 that I KNOW would only cost me $15 online because I need the damn thing. Convenience has won. Whereas I was in Queenstown (lucky? yes) and we walked into a shoe store to get fitted with some good hiking boots. These days you can go into any store and with the wonderful iPhone (or similar) logon to sites such as Dealtime.com and enter the details of what you are about to buy. Dealtime.com will search hundreds of online stores and return results in seconds. As is turns out the shoes I wanted were $360.00 NZD in store… but only $60 USD online. You read right – $60. Yes there is currency conversion and yes there will be shipping to pay for, but price has won out for this punter.

Some would buy the boots anyway because… well gosh darn it, they are in Queenstown and they need them now. Others are happy to wait for 10 days and save what turned out to be 70% lesser purchase price on said boots.

In my mind this ushers in a whole new era of retail. Stores can only justify large margins in areas where the ‘convenience’ of their supply outweighs their margin or if the product is so niche they are the only ones who have it. This is because you can walk into any retail outlet and get instant real-time comparisons on pricing anywhere you go.

Even the ‘impulse buy’ that High Street retailers rely upon will not escape the ease of instant price comparison on the global scale that is now supplied into their customers hands.

So what might Shopping Malls look like in 2015? Imagine stores only carrying one of each size/shape/colour and once you decide to buy they send it to you direct because it saves you 30% on the price? Would you shop there? Would your children one day?

This more intimate relationship of manufacturer to end user could have far reaching implications, especially for 3PL. It will be interesting to watch this unfold as the winners will be the companies with flexibility to adapt to the new processes and technology the best. That probably won’t be the NZ companies with Head Offices and IT departments based out of Singapore or Sydney. For once, small size will be on your side.

So for those independent NZ based 3PL’s and freight forwarders who can make their own decisions, it could be your time to shine.

Brooke Andersson– Managing Director, XM Developments