This week one of my favorite retailers died. I used to love HMV! When I worked of Piccadilly Circus I spent many happy lunch hours checking out movies and music. But that was in in 1997 and the way we shop has moved on. Today my kids and I browse movies and TV shows on Netflix and Singapore’s pay-per-view Mio TV system, we sample tracks on YouTube and download what we like from iTunes.
It’s pretty clear now that HMV’s demise was predictable as entertainment shopping has moved from the high street to the super highway. HMV is the last of the big UK brands to go (after the demise of Tower Records, Virgin Megastores, Borders, Woolworths and – in the same week as HMV – Blockbuster Video). It’s also true that HMV did too little too late to turn its offer around.
But what does this latest high-profile closure tell us about the future of shopping?
1) The future of shopping is online, or more accurately will have a significant online component. It seems impossible to imagine, now that so many have embraced online shopping, that shoppers will give up the convenience they now enjoy. It’s also pretty clear that no category will remain entirely immune – let’s just look at the history: first travel went online; then insurance and banking; then entertainment; and now then home appliances and computing, grocery shopping and fashion are all seeing a significant shift. China’s e-commerce rise proves that this will be a global phenomenon and it’s fair to presume that emerging economies may embrace online faster than developed ones.
2) Shopping in the future will be even more globalized.
The internet knows no borders and even as legislators and corporations seek to limit the availability of products and services, innovators (sometimes also called criminals) are constantly finding ways to circumvent these barriers. Again I look to the entertainment industry as proof of this. Deliberately or by accident, the industry has always been stymied by limited availability. Peer-to-peer sharing was a response by high-school kids to not being able to afford to own as much music as they wanted to consume (just as home-taping was for my generation). Piracy of music and film in the developing world is most probably caused by a shortage of cinema screens and official music stores that could serve huge untapped demand. The current boom in downloading is simply the next response to limitations in content availability. In future shoppers who want global brands, major movies and access to the best insurance deals will find ways to buy them regardless of their country of origin and they’ll use the web to do this.
3) Shopping will become more interesting. Let’s face it, supermarkets are boring places. Even in emerging markets the appeal of big boxes is waning as they become a normal part of people’s lives. Globally, grocery shoppers complain about long lines, poor product availability, wasted hours and so on. Online shopping should make many of these complaints a thing of the past. Yet people still love shopping as a social experience, recent data suggests people want to go to stores to touch and feel actual products. For millions, shopping is a pastime to be enjoyed with friends and family, it’s therefore fair to predict that the relatively mundane act of paying for goods may become divorced from the relatively pleasurable act of shopping for goods. It’s likely to that in future the opportunity to experience products and services through retail spaces as well as online and in virtual reality environments will stimulate innovation in these environments that will simply make shopping much more fun.
With so much changing in the world of shopping, the shape of retail is likely to change dramatically in the coming years. I believe that we will see these major structural changes starting to have a real impact in 2013. In my next post, I’ll share how I believe this is going to affect retailers in the coming year.