I do love Alvin Toffler’s notion of demassification even if the spell check on my Mac hates it. Oversimplifying it by quite a bit I could describe it as the post industrial revolution direction of the western world toward non-linear, intercommunicated individualism. This direction’s impact is far from fully realized and as with any time of serious change, it is we who are in the middle of it that have the hardest time seeing it.
The industrial revolution, by the requirements of its nature, was a massing of assets. People, technology, transportation, money, government all had to physically come together to drive the engines of the revolution. Because of this massing of assets a culture that reflected the revolution’s form grew up around it and with that a mindset of doing things industrially. Every institution followed the factory model. The world revolved around the punch clock. All processes look like assembly lines.
The mindset of the industrial revolution is proving harder to break than the revolution itself. For this reason the biggest institutions of our time have been surprised at their sudden demise. The major television networks, music industry, marketing giants are the most high profile, but many into this shocked group. The consumer simply has more choices in every aspect of their world. With the growth of the web the ability to realize individual choice has been realized. Interestingly, the web in an enabler not the cause since real demassification started in the 1950’s – move to the suburbs anyone?
What does this have to do with Retail?
Department stores are a product of the industrial revolution. In order to have a department store, let alone a chain, several products of the industrial revolution must be in place. Massive, city sized infrastructure, transportation, monetary systems, workforce, etc. to support the business. You must also have a captive population. I say captive because the cornerstone of the massive institution is the captive client. Once open choice enters the equation the massive institution begins to erode if it cannot adapt. Consider the shopping mall as an adaptation of the demassing of the population.
But competition, before the web, was a fight among giants for consumer dollars. Small or single store retailers posed no threat to organized retail. Even in boardrooms today you will only hear analysis of what Macy’s, Penney’s or Target is doing. What is not discussed is the real, up coming threat - The micro retailer.
What needs to be understood is that important difference between traditional retail and new retail is the off-line, physical tradition. The current core of consumers understand the mall and the department store, as destinations to acquire the mass produced goods they need. However, as the shift in comfort toward e-commerce continues younger shoppers will lose the ability to discern the difference between massive and small retailers.
I have mentioned in previous posts that the individual retailer is far better equipped to discuss and market a small product assortment in a better way than a big one does. What the big guys are missing is that 100 million dollar marketing programs, which rely on the massive marketing infrastructures that are fading, are now competing with nearly free marketing and that the real gap is not dollars but time.
The OPEN Small Business Monitor Survey results indicate that small businesses are increasingly relying on social media, with 4 in 10 business owners using social platforms. One year back, only 1 out of 10 business owners was practicing social media. As expected, Twitter, Facebook and LinkedIn are the most popular social media tools amongst the small business fraternity.
Douglas Idugboe, Read more here.
As the small retailers embrace the same social media that now nearly half of the US population already has, the intercommunication between these small businesses, customers and extended relationships will multiply. In the online world all media has an equal potential and all of it consumes time at the expense of its competition. The day is quickly coming when most of my non-food purchases arrive via post and all boxes in the mail look alike. When the future shopper comes along, the one who has no allegiances to brick and mortar traditions, those mass institution will need an answer to what makes them a better choice.
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