If clicks win... part two
How does the Internet replicate the sport of shopping? Two bearded men will probably go "sport?!?!" but some find it sporting to battle at the mall.
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Great Debate: Is e-commerce killing brick and mortar?
Jason Perlow sees clicks killing bricks. David Gewirtz says the brick-and-mortar shopping spirit will remain alive and well.
Jason Perlow
Yes, clicks rule
or
No, bricks live
David Gewirtz
Best Argument: Yes, clicks rule
The moderator has delivered a final verdict.
Opening Statements
Brick and mortar will be largely a cultural anachronism
Jason Perlow: As much as it bothers me to say it, clicks are absolutely killing bricks. No, it won't happen overnight in some kind of apocalyptic mass extinction event -- but anywhere between ten and fifteen years from now, the makeup of what we call "brick and mortar" today will be largely a cultural anachronism.
Will Brick and Mortar disappear entirely? No. We'll always need certain types of walk-in retail, and some types of businesses will be more resistant than others. Just like the Crocodilians survived the big 'ol asteroid 65 million years ago, we'll still need places like Walgreens and maybe even Target or Wal-Mart.
But ten years hence retail footprint will be a shadow of its former self at best, and heavy competition from online will force only the strongest and most customer-oriented brick and mortar businesses to survive, with the inevitable consolidation of some of the largest businesses to follow.
The dinosaurs didn't go extinct overnight. And there are reptiles that still live today that aren't much different than ones that lived in the Cretaceous. Similarly, the most robust brick and mortars will still be with us ten or twenty years from now. But the weak or unadaptable will not survive.
Brick-and-mortar shopping spirit will remain alive and well
David Gewirtz: No, e-commerce is not killing brick-and-mortar. Changing business models are hurting some retailers, while others are thriving.
This is not new. For more than a century, retailers have had to change with the times or lose their customer base. Whether it was the big fight in the early and mid-20th century against chain stores (there was actual legislation), or the cries in the later 20th century against so-called Big Box stores and WalMart, or the backlash against online music distribution and Amazon-like e-commerce, there's always been change and pushback by those threatened by change.
As long as there are pepper-sprayin' mamas willing to dive head first into crowds of WalMart shoppers in order to score cheap XBox 360s, the full-contact, hands-on, brick-and-mortar shopping spirit will remain alive and well.
The Rebuttal
Great Debate Moderator
Oy vey. Even sport has been eclipsed by technology.
If shopping was a "sport", it's like Major League Baseball is today. The traffic to get to the game is a total time kill. After you've hacked off a leg to pay for your seats and the ridiculously expensive parking, the concessions end up eating whatever is left of your wallet and then you have to watch tiny players on the field up from the nose bleed section. It used to be fun, but now it sucks. It's much more enjoyable to sit back on your couch, pop open a beer, crack open a bag of pretzels, and see everything in crisp detail on a big screen TV. And then be able to pause the action when you need to take a nature break or grab another Miller. In the same sense, there may be a lot of people that love the idea of shopping, but they don't love under-trained salespeople that don't know the products or worse, mislead you into buying something you didn't want to buy. They certainly don't like having to kill entire weekends stuck in traffic to get back and forth to the mall, and they don't like having to drag their kids around and make it an entire ordeal while they get tired and hungry and scream and yell and embarrass you in front of hundreds of people and demand you buy them things. For every reason you can call shopping a "sport" there are a dozen other reasons why it sucks. With various technological improvements, the Internet may actually make shopping a fun and stress-free family experience again. Who the hell wants to replicate something that is completely awful when we can completely re-define it instead?
Jason Perlow
I am for Yes, clicks rule
Shop until they drop from clickity-click exhaustion
Nope, this beard never liked shopping, so I didn't play this particular sport. Politics is my sport. But I've watch my wife play, and she's quite the master. She makes powerful use of wishlists as ways to "buy" stuff. She claims she gets almost as much juice wishlisting an item as actually spending money on it. As you might imagine, I'm all for that. There is also the sport phase, like when people snipe in eBay auctions, people clamor for Groupons, and people bargain hunt across hundreds of sites. Plus, with Facebook, groups of like-minded crazy shoppers can share the like and shop together until they drop from clickity-click exhaustion.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Defending bricks
I just made you two CEO of Target and Kohl's. Defend your brick model against ecommerce. What would/should you do to defend yourself?
Posted by Lawrence Dignan
Transform or die
If you're a Target or a Kohls, you had better damn well be preparing yourself for a transition towards clicks. Because if you aren't, you're toast. To transform you need to get certain etailing technologies in place that replicate or even surpass your in-store experience. The e-tailing services that exist today need to mature and become more customer oriented in order to substantially reduce the need for physical retail. Amazon has a very good model today for dealing with order tracking and returns, but that can be further improved by having real human beings on the telephone or on video chat available to answer questions, particularly in situations where a sales associate would perform the role of helping to choose products. Additionally, I expect that a online store in the future would have extremely detailed information and pictures or even 3D models of products, as well as an ability to easily compare and contrast similar products in inventory. The easier it is for a consumer to understand and have confidence in what they are buying and who they are buying it from the easier it will be to sell the products. The more the in-store warm and fuzzies can be replicated electronically for the consumer, the more dead Brick and Mortar becomes. And if your competitors are adapting towards this model, you had best do the same.
Jason Perlow
I am for Yes, clicks rule
Community!
Consumers like good prices. They like good quality. They like convenience. And they like be part of a shopping community. The online shopping experience is isolating. We offer community. We are constantly reducing the friction in the retail experience. If we continue making it easier to buy something (and, just as easy to get it in hand or return it), then our cash registers won't ever stop making that wonderful cha-ching sound.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
If clicks win...fallout time
10 years from now will there be retail sales positions?
Posted by Lawrence Dignan
Yes. But like everything else, it will be mostly virtual or outsourced.
Yes, but they will be few and far between, such as in specialized luxury goods stores in affluent areas and the few auto dealerships that are left standing once they too have gone to the "Showroom" model and cars are bought almost entirely online. On the e-commerce side, these positions will be filled by outsourced call center personnel using telepresence technology.
Jason Perlow
I am for Yes, clicks rule
By any other name...
Yep. Many will have moronic names like consultant, advisor, or concierge, but they'll be sales folk. And some will be very effective rainmakers and some won't.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Role of mobile commerce
What's the role of mobile in your respective visions?
Posted by Lawrence Dignan
Disruptive and already relevant
Mobile is a disruptive technology and in my view will likely be where much of the initial dismantling of Brick and Mortar actually occurs. When supermarkets and drugstores and warehouse stores like COSTCO and Sam's start offering Apps that allow people to pick up their groceries and prescriptions when they are on the way home from work, you know the revolution has begun. I'm most interested in seeing what Amazon tells us after Year One of Kindle Fire and how much sales end up being generated by their app for Android and iOS. ComScore has recently reported that during this holiday season, most people who own smartphones already have used them to buy merchandise online. So it's already happening. My guess is that we're likely to be absolutely stunned by how much stuff was purchased on mobile devices at the end of 2012.
Jason Perlow
I am for Yes, clicks rule
Integrated everywhere
Mobile will be integrated into everything and everywhere. But not for *everybody.* (See growing divide between haves and have-nots.) It will be an added convenience, but it will also be a deep and disturbing intrusion into our privacy.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Playing devil's advocate
eBay has mobile, logistics and e-commerce. Elaborate on why you think eBay is toast. I don't buy it.
Posted by Lawrence Dignan
Not toast, but I don't see how they are the same.
Ebay and Amazon are two completely different types of companies. One is more of a giant lawn sale with cottage businesses dumping merchandise in a "Buyer Beware" type of bottom feeder environment while the other has e-tailing in its DNA. There's just no comparison between the two. Will people still need eBay 10 years from now and hunt for pseudo-grey-market kinds of stuff like unactivated Verizon smartphone handsets? Or somebody's old comic book collection? Sure. But its different stuff.
Jason Perlow
I am for Yes, clicks rule
Just not as relevant
Ditto that, Jason. Sure, eBay can return to its roots. The longer this economy stays in the pits, the more promise the auction site's original premise holds. But eBay will never be as relevant as Amazon to the bigger clicks vs bricks question.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Amazon vs. eBay
Of the two ecommerce giants---eBay and Amazon---which one will have the edge in multi-channel retailing? Why or why not?
Posted by Lawrence Dignan
Is there an echo in here? Amazon.
Like David, I believe Amazon has the edge in not only overall reputation and customer satisfaction but also in its ability to partner with existing Brick and Mortar retail, such as its relationship with Target as a secondary goods supplier and also with their ability to place their own products (aka the Kindle) into the channel.
Jason Perlow
I am for Yes, clicks rule
Amazon, without question
It's amazing to me that eBay hasn't imploded already. It took what was once a unique selling premise and botched it up completely, offering random crap from companies rather than individuals. By contrast, Amazon, with its network of web services as well as distribution centers and wide product offerings, with the Kindle, and Amazon Prime -- Amazon may well be the most interesting company with the most potential of any we watch.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Try before buying
Won't people always have to try out goods and touch before buying?
Posted by Lawrence Dignan
Only with certain types of durable goods.
Do you really need to see a refrigerator or a lawnmower in person? Or a commodity desktop or laptop computer? Some old-school sticklers do, but I certainly don't. Apple has certainly proven that people will buy iPhones and Macbook Airs on the web sight unseen, months before product availability. I'll give you that certain businesses such as say, luxury fragrance merchants, a jeweler, a watch store or Crabtree and Evelyn might require brick and mortar presence, but these are really only likely to survive in affluent areas, and will concentrate themselves around completely re-designed malls in New Suburbia rather than as free-standing stores. David talks about going out to eat his favorite ice cream cone and bringing his car to the mechanic. Just to be clear, I don't think service-oriented businesses and especially restaurants are really part of this new electronic retail model that I envision. Dining out is something that is much more fundamental and essential to American culture. It will change, to be sure -- and it is well underway -- such as decline in fine dining and more of a trend towards QSR-oriented concepts (Quick Serve Restaurants) but it absolutely will not disappear. That being said, many people are already eschewing Bricks for Clicks. My 65 year-old parents live in Boca Raton, Florida, are perfectly ambulatory and fit, but buy virtually everything online. If they can avoid going to a shopping center, they do. Sure, sometimes products arrive that aren't exactly what they wanted, but guess what -- Amazon and other large e-tailers have a great customer service departments and you can return items, just like brick and mortar. You got a United States Post Office near your house? Then there's no problem. If COSTCO had a service that dumped stuff right at their front door, I'm sure they'd pay a premium to do it rather than burn gas and wasted time. And I suspect many millions of people feel the exact same way.
Jason Perlow
I am for Yes, clicks rule
Depends on the return policy, along with shipping costs
With a good return policy and either free or near-free shipping, people will be much less hesitant to try something from a trusted (note the emphasis on the word "trusted") online retailer. But I'm still going to go to my tailor for my suit, and I'm still going to bring my car to my mechanic, and I'm still going to go to the local oh-so-amazing ice cream shop for their chocolate, raspberry, peanut butter cup surprise. Okay, that last one I'm going to do much more rarely. Gotta watch my figure, you know!
David Gewirtz
I am for No, bricks live
Great Debate Moderator
2021
Perlow, you argued that all shopping will occur online by 2021. What has to happen to get there? David, give the reality check.
Posted by Lawrence Dignan
Emerging technologies must mature to provide a superior experience
There are a bunch of enabling technologies that will mature over the next 10 years that will allow the online shopping experience to be better than what exists in brick and mortar, and thus make it the preferred way to shop and engage in retail. The first being display technology. Right now, we're looking at iPad 3 tablets having the potential for greater than full HD resolution (2560x1600 WQXGA) being shipped at the end of just 2012. By 2021, it is not unreasonable to assume 4K (4096x3112) resolution on large screen computer monitors and TV sets will be fairly commoditized and even higher resolution displays may be affordable by that time. With higher resolution, more brilliant color displays on tablets, smartphones and TV, the more realistic the depiction of the merchandise. In addition to higher resolution, 3DTV technologies as well as virtual and augmented reality (assisted by wearable computing and motion-tracking interfaces such as newer implementations of Kinect) will actually allow the consumer to shop in realistic, immersive virtual in-store environments, and even "wear" clothing or "touch" merchandise right from their very own homes. Need help with your purchase? Telepresence technologies will allow retail sales assistants (based out of a call center somewhere) to help you pick out exactly what you need. Or help you return an item. Not sure if that dress you picked in the virtual store is "You?" No Problem. You'll even be able to patch in your friends via group shopping trips to see what you are buying and help make suggestions. The best part? No traffic jams, no holiday road rage, no fighting for parking spaces, no crowded stores, and no more pepper-spray filled Black Fridays.
Jason Perlow
I am for Yes, clicks rule
Not gonna happen. No way. No how.
First, just looking at this last Black Friday, where retail sales outsold online sales by a factor of about ten to one, it's clear retail is still going very strong. Then, factor in societal issues like the digital divide I talked about, and even add in basic convenience issues like, say, I want a replacement for the lamp I broke tonight, rather than in a few days. Retail is here forever.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Bricks and clicks question
Do you see specific verticals favoring the bricks or clicks side? Will most tech be online vs lawnmowers in person etc.?
Posted by Lawrence Dignan
Online may actually be an advantage for Verticals.
Certainly verticals are going to move towards an online business model, particularly if they sell highly specialized items and want to reach a national audience. This is already happening. Perfect example: Who did I buy my portable 6,500 watt generator from during the aftermath of the summer tropical storm that completely whacked our local infrastructure in New Jersey? Did I go to Home Depot or Sears who had people piling up for days trying to buy one because they couldn't keep one in stock? Nope. Home Depot's and Sears' websites couldn't even get me one quickly enough even if I wanted to overpay to expedite the shipping. Neither could Amazon, for that matter. So I went to PowerEquipmentDirect.com which had plenty of units in stock. Did I need to see the item in person before I spent $1500 on the system and had it shipped 3 day UPS to my house? Did I need to touch the thing? No, I read reviews, and the company had a great "Choose your Generator" app that showed me how various models compared to other ones from different manufacturers. Now, granted, this company has a showroom and warehouse in suburban Chicago filled with their merchandise, but I wasn't exactly going to go down there and look at one. I knew it was an established business with a good reputation and my AMEX platinum card rep would fight tooth and nail if any funny business occurred.
Jason Perlow
I am for Yes, clicks rule
Specialized merchandise will go online to aggregate reach
Yes. I just spent the past few days trying to find an X10 appliance module, which used to be available from Sears and Radio Shack. No more. Too specialized. Specialized merchandise will likely go online to aggregate reach. For example, there are a lot of people who like to fly model helicopters, but only a few in each town. Aggregated nationally, it's a solid business. But only a few communities could support a dedicated store. By contrast, I have a friend who has a brick-and-mortar high-end classic car dealership. The Internet is a huge boon to him. He gets new stock for his store from online sellers and can reach a worldwide market.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
IT systems key
What IT systems will be most critical for e-commerce and brick-and-mortar operations?
Posted by Lawrence Dignan
Security, Authentication and repeatable e-tailer solutions in the Cloud
I agree with David that Security and identity protection is going to be concern #1. To that end, multi-factor authentication using biometrics and/or mnemonics will need to be perfected. Additionally, the e-tailer industry and the web as a whole needs to move to 2048-bit encryption as the 128-bit certificates that are in common use today no longer will serve the needs of the industry once supercomputing economies of scale reach commodity systems. Additionally, a secure and resilient public e-tailing cloud with repeatable, packaged solutions needs to become a reality and not a pipe dream. Setting up an e-store should not require an army of consultants or IT staff, you should just be able to buy your virtual floor space, and have back-end systems pre-built that are ready to plug in. Having to engage web designers to create your virtual window dressing or shingle for corporate identity should be your biggest problem. For the most part, I see the larger players in IT such as IBM, HP, SAP, Oracle and Microsoft, as well as Amazon providing the outsourced infrastructure, software and services that are needed to make this work.
Jason Perlow
I am for Yes, clicks rule
Security and identity protection
After that, there's the interesting question of how can you use tech to make the experience better. In my family, we just started using a networked grocery app that lets us track our groceries, update what we need, and even optimize by aisle and store. This will either revolutionize how we manage food, or be another geek excursion we discard after a few weeks of fiddling. My point is, though, that retail systems like RFID can be intrusive, or they can be innovative. Let's hope for some awesome innovation.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Showroom as ghost town?
What happens to retailers if their stores merely become showrooms for online purchases?
Posted by Lawrence Dignan
Survival of the Fittest
Well I think it depends on the retailer. I think Apple's retail stores are -already- showrooms for online purchases. In many ways, Steve Jobs really did understand what the future of retail was all about. Some retailers will survive this phenomenon when it occurs, such as the Best Buys of the world that already operate in volume and thin margins. But they won't have as many of these stores around as they used to and will have to consolidate their showroom locations and focus more on regional shipping and warehouse operations instead. And guess what, that's where most of the remaining jobs in retail are going to be too. In the case of smaller or medium-sized retailers with showroom space, what you may end up see happening is them partnering with Amazon or other large e-tailers such as Best Buy and Wal-Mart and Target to act as the front end broker. In essence Amazon and Best Buy and Wal-Mart will outsource and productize their e-tail clouds, because their platforms will be the most mature. And they'll take a piece of the action, to be sure.
Jason Perlow
I am for Yes, clicks rule
That depends on the business model
Apple has turned its stores into destinations, places where people go for support, or even to rub up against other fanbois. Product sales are only part of the magic. It's tough, though, for retailers who stock products and show them, only to have consumers then go online and buy them from another company. No one said this is going to be easy, but that doesn't mean retail is going to die. Some retailers, though, will.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Retail haves and have nots
In your estimation, what retailers are ready for the multi-channel commerce today---clicks, bricks and mobile?
Posted by Lawrence Dignan
The big players that dominate today will dominate tomorrow.
The ones with the most retail power -- Wal-Mart, Target, Best Buy and the warehouse stores like Sam's and COSTCO are the ones that will be ready for Multi-Channel commerce. Now the department stores -- those guys got real problems. I don't see them thriving in this new model. Tyrannosaurus, meet asteroid. I could see Sears returning to its roots and becoming more of a catalog goods supplier and hooking up with Amazon or perhaps Wal-Mart. But Macy's? Bloomies? Nordstroms? Neiman-Marcus? Dillard's? Saks? Like Fortunoff, which died in 2009, they'll all be pushin' up the daisies, folks. Alas, poor Gimbels, I knew him. And just what do you think happens to shopping malls when these anchor stores have to inevitably close? It means they will have to find other ways of being profitable. Can you say big time consolidation of the big box stores within the next decade? Yep, I knew you could.
Jason Perlow
I am for Yes, clicks rule
One company has this wired
So here's the thing. I rarely ever shop retail. But I'm not the mainstream. Many of our classic retail chains are making the move online -- Target, WalMart, B&N, Radio Shack, etc -- with varying degrees of success. But you know who has this wired? You want to know one company with both a strong online presence and a chain of retail stores that are almost mind-blowingly successful? How about a chain of retail stores that's growing even though its products can all be bought online? How about a chain of retail stores that started after the e-commerce boom, and has been growing at an epic rate? Yep, that's right. Apple. Apple is proving retailing is as important as e-commerce. Frickin' Apple.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Internet sales taxes
Do Internet state sales taxes factor into either consumer behavior or your position/theory?
Posted by Lawrence Dignan
Sales Taxes, no. Loyalty/Incentives and Free Shipping, yes.
I fundamentally have to agree with David. While some consumers will agonize over ten dollar differences between one vendor or another in terms of total end to end door to door cost (of which taxes are a factor) ultimately they will want to gravitate towards vendors that are giving them the best deal overall, and that could be in the forms of incentives and or loyalty programs, such as Prime. It should be noted that in ComScore's most recent reports, Free Shipping (using programs like Amazon Prime or via promotional programs) was a driving reason why customers shopped at particular online retailers. Taxes really didn't factor into the equation.
Jason Perlow
I am for Yes, clicks rule
Not a significant factor
There are always consumer cohorts that have price sensitivity. Because tax is a price component (like shipping), these price-aware consumers will tend to gravitate to the best deal. Will state sales taxes materially constrain the growth of e-commerce or give it an unbeatable advantage? No.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
How do you expect consumer behavior to evolve over the next decade?
Clicks, bricks or something in between?
Posted by Lawrence Dignan
Digital Convergence as the focal point for retail activity
If sub-$200 computing devices like Kindle Fire are the beginning of this trend towards subsidized or inexpensive tablets/digital convergence, and public/free Wi-Fi or pay-as-you go 3G/4G service in the US becomes more commonplace (as it is in Europe and Asia) then it goes without saying that these devices are going to end up being the main focal point for commerce itself. The shopping apps and websites are also going to become much more sophisticated and user-friendly over the next five years. They will also learn individual consumer behavior and know exactly what kind of products to push, and consumers will be able to set up recurring shopping lists (for things like groceries) and integrate this into their financial planning with their banks to track their spending behavior and set up savings for particular items. This isn't Sci-Fi, this is what banks and retailers are working together on for their customers now, and you'll see some of this coming to banking apps/websites on your favorite smartphone or tablet this year. Yes, there will be "Food deserts" as David describes in the big cities, but these are problems associated with de-population in general. And with de-population brings inevitable retail vacancy. If David can figure out how to keep retail space open when people are depopulating large urban areas because they can't afford to live there anymore, I'm all ears.
Jason Perlow
I am for Yes, clicks rule
We'll see a growing divide
Sadly, I expect we'll see an even greater divide between the haves and have-nots, between digital citizens and those unable to get online, between those who can afford smartphones with ninety-buck-a-month plans, and those who can't afford anything close, between those who can have packages left on their doorsteps and those who can't even safely walk out their doors. We techies often forget just how hard it is for many of our citizens, and it's only going to get worse. There won't be magical food delivery services for everyone. Instead, there are now dark areas of our cities called "food deserts" that aren't even served by food retailers. That, too, is only going to get worse. For Jason and me, and most of our readers, e-commerce will rock. For millions of Americans and people around the world, it would be nice if they could just count on having access to food and basic necessities.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Convince me
Full disclosure: Based on the retail numbers I'm convinced Perlow is smoking something so good luck there Jason. ShopperTrak put Black Friday physical retail sales at $11.4 billion. Cyber Monday sales came in at $1.25 billion, according to comScore. Convince me that clicks will kill bricks or that Perlow's side is nutty.
Posted by Lawrence Dignan
6 Billion Dollar Cyber Week, Larry.
Larry, that may not sound like a lot right now but let's look at overall growth. Earlier this year Forrester Research projected online retail sales in the U.S. would increase 11.98% in 2011 compared with 2010, to $197.3 billion from $176.2 billion. Originally, back in March, Forrester projected that the annual rate of increase will decline slightly each of the next several years, with online retail sales in 2015 rising 7.81% over 2014, to $278.9 billion from $258.7 billion. That represented a 9.62% compound annual growth rate for the U.S. over the five-year forecast period. And where is that growth occurring? At the expense of Brick and Mortar. If we take in this last Black Friday's sales (a 26 percent increase over the previous year's online sales activity according to ComScore) and the record breaking billion dollar Cyber Monday (and a $6B Cyber Week) into account, then I am sure we are looking at revised e-tailer growth figures in the offing from Forrester and other industry analyst groups. Post-Thanksgiving 2011 should serve as a wake up call for department stores and large walk-in retailers. Change is already underway.
Jason Perlow
I am for Yes, clicks rule
Retail is here forever
Like I said in my opening argument, for more than a century retailers have had to change with the times or lose their customer base. Whether it was the big fight in the early and mid-20th century against chain stores or the cries in the later 20th century against so-called Big Box stores and WalMart, or the backlash against online music distribution and Amazon-like e-commerce, there's always been change and pushback by those threatened by change. Retail is here forever. As much as I respect Jason, in this one pronouncement, he's smoking the good stuff.
David Gewirtz
I am for No, bricks live
Great Debate Moderator
Testing 1, 2, 3
Just doing the mike check for technical purposes.
Posted by Lawrence Dignan
Ready
Rock and Roll.
Jason Perlow
I am for Yes, clicks rule
Check: Standing by...
...and ready to rumble.
David Gewirtz
I am for No, bricks live
Closing Statements
It's merely a question of when
Jason Perlow
It's not a question of "will" retail Brick and Mortar die, but "when". For certain types of businesses, it will happen faster than others.
Only the biggest and most powerful and most efficient retailers -- such as Wal-Mart, Best Buy, Target, and Costco --
will survive the culling. So in the future there may not be as much choice for comparison shopping in Brick and Mortar, especially if these powerful chains, or companies like Amazon, end up owning much of the electronic shopping real estate as well, or end up controlling the channel for smaller distributors of specialty goods.
For durable goods with lots of reviews, which are not highly specialized and aren't as susceptible to the sensual experience in order to make a convincing buy, customers are going to move to online sales much sooner rather than later.
All of this depends how quickly the enabling technologies mature and how much they cost. Technology is certainly moving extremely fast in this area and it is difficult to predict when this retail transformation to a largely online-based model is going to occur.
For the middle class it will very likely happen a lot faster than for the working class, since they will easier be able to afford the enabling technology. But eventually, everyone will prefer to shop online.
Change is always in the air
David Gewirtz
There's no doubt that change is in the air. Change is always in the air. That means that some retailers will go out of business, some will flourish, and we'll even see new players enter the market.
The online commerce world is tapping into the needs of consumers, but it, too, is at risk. For example, while UPS and FedEx can shoulder much of the delivery burden, so too must the very beleaguered US Postal Service. While huge sellers like Amazon can shoulder increases in shipping costs, most small e-commerce vendors can't.
And there's the rub. Even in e-commerce, there's a shake-out. Free shipping programs like Amazon Prime effectively sideline many smaller sellers, or send them into the somewhat unreliable arms of "fulfilled by Amazon."
There are good and timeless reasons to shop retail, from the need for goods today, to the desire to handle, see, and touch a product, to the desire to validate that what you're buying is what is actually being represented as for sale, to validating quality personally, to the inability to reliably get packages, to the desire to not spend on shipping, to the difficulty in surviving the individual package shipping process, to the increasing problem of poorly packed products -- and so on.
Jason is right that clicks will grow. I, personally, buy far more online than in person. But I'm relatively affluent, and when I don't want to go into a store, my wife is willing to put up with the crowds and lines.
I do have to caution that most affluent and even moderately affluent people have no real picture of what the poor in America are dealing with. The more we integrate e-commerce into our daily lives, the more we leave those people behind.
If China can push many of its formerly impoverished citizens into the middle class, so can we. And once we do, they, too, can shop at retailers like WalMart and Target, buy from Amazon and Apple, and bring pepper spray to an Xbox sale.
It's the circle of life and it's a beautiful, beautiful thing.
Perlow wins
Lawrence Dignan
This debate was lopsided in Jason Perlow's favor. I went into the debate skeptical that e-commerce would trump physical retail, but Perlow almost convinced me. Jason is the winner hands down given his solid arguments for his side.
Brick-and-mortar shopping spirit will remain alive and wellIN PARTNERSHIP WITH Ricoh
David Gewirtz: No, e-commerce is not killing brick-and-mortar. Changing business models are hurting some retailers, while others are thriving.
This is not new. For more than a century, retailers have had to change with the times or lose their customer base. Whether it was the big fight in the early and mid-20th century against chain stores (there was actual legislation), or the cries in the later 20th century against so-called Big Box stores and WalMart, or the backlash against online music distribution and Amazon-like e-commerce, there's always been change and pushback by those threatened by change.
As long as there are pepper-sprayin' mamas willing to dive head first into crowds of WalMart shoppers in order to score cheap XBox 360s, the full-contact, hands-on, brick-and-mortar shopping spirit will remain alive and well.
Posted by Lawrence Dignan