Examining The Current Cycle Of Retailing

Examining The Current Cycle Of Retailing

Retail innovation cycles last approximately 20 years. As we take a look at retail history, this cycle becomes self-evident. From the general store to department stores to discount stores and so forth, each variety has their day in the sun as the leading channel for most purchases. Today, we’re lucky enough to be living within two powerful cycles simultaneously. But the fun will soon come to an end.

In early December, I was engaged on my annual “slash & grab” Christmas shopping excursion. It’s the one day of the year where I aggressively visit a variety of stores and web sites to take care of my giving list for the season.

One of the items on my list was cordless headphones for our stereo. I went to Best Buy and found a pair of Sony headphones. The price was $99. That felt really high to me. With my smartphone, I scanned the UPC on the box and quickly found that Amazon.com sold the exact same item for $59. To add to my bonanza, no sales tax would be added to my online purchase and as an Amazon Prime member, shipping would be free. So in effect the price difference was actually $110 vs $59. No contest. The sad reality was that without putting them on my head in the store or being able to carefully study the box, I might not have bought them at all.

Of course, my behavior has a new name within retail circles -- showrooming. Now, I recognize that Best Buy was willing to match the online price at the store. And I wish I had taken this path to see how it worked for me. But this effort on their part doesn’t answer the larger question.

The larger question being…how long can this continue?