History of the retail business part B | Industry Study

Today's video is the second part of a walk through the history of the retail business. The business that has seen tumultuous changes in the past decade and a half, changes that have thrown up some big new names that did not exist in the last century, and brought about the demise of many older and established retail businesses.

So let's begin.

How times change! Take shopping, for example. There was a time, not all that long ago, in our own living memories, when things were very different with the way we shopped.

Or were they, really? Let's check it out.

Imagine our friend Tina from the year 2022 going back in time to the year 1950, and asking someone if they had a supermarket in their area.

My guess is that the conversation would have gone something like this (remember, the 1950s man is still in the 1950s while Tina is in the present, and they are talking across time:

Tina: Hi! Do you have a supermarket in your area?

1950s man: Huh? Supermarket? What’s that?
Huh? Supermarket? What’s that? A place where Superman does his shopping? 
No, silly, a supermarket, as in a very big market.

Tina: A place where you shop for all kinds of things?

1950s man: Well, I shop for all kinds of things a couple of streets away where we have our local market. But we don’t call it ‘supermarket’. It’s just a market. In fact, it’s just a street with many shops selling all kinds of things!’
Tina: Really? All kinds of things?

1950s man: Yeah, really. All kinds of things. It’s so convenient.
We have a grocer. In fact, we have three grocers there. And we have a fruit seller, and there is a bakery, four fish-mongers, two meat shops, and then … what else… four or five clothes shops, and a couple of shops that sell all kinds of knickknacks like hairpins and brooches, and there is a stationery shop, and even a toy shop! There are two barber shops, and a cobbler. Yes, and a dairy outlet.

What else? Ah, we have a barber down the road. And … let me see … only for a newspaper or for books do we have to walk a couple more streets and we get those too.

Kiron: But Tina won’t give up, will she, trying to show our 1950s man how much better Tina is in the year 2022? So she persists. 

Tina: OK, you have all these things … but are they all under one roof?

1950s man: No, they are not. And why should they be? They are owned by different people.
Tina: I get that. But being under one roof also means that if it rains you don’t have to open your umbrella or fold it every time you leave a shop or enter it.

1950s man: Ah! That does make sense. But, you know, we have that kind of a market about a mile away. It is a completely covered market all under one roof. I can go to different stalls there and to different sellers, and buy fruits at one stall, vegetables at another, and grains at a third. One lane is devoted to fish and meat. And on one side there are shops selling all kinds of cosmetics, and stationery and other stuff. No barber, though.

Tina: I see. So you are saying it’s all very convenient and easy! Nice.

Kiron: Tina is about to give up her superior attitude, when the 1950s man pipes up:

1950s man: But I wish I didn’t have to get out my house to do my shopping. Wouldn’t that be even better?

Now we don’t know if this 1950s man was being visionary or simply argumentative, trying to score a point over Tina. But the fact is that, seventy years after the 1950s man, in fact, a little more than five decades afterwards, we are there already. It actually took us a little more than five decades after that.
In fact, we have been there for quite some time now. Now we don’t have to leave the shelter of our homes to do our shopping. 

We simply go online to an online shopping site, and place our orders, and the stuff we want gets delivered later that day or in a day or two. 

Obviously, Tina couldn’t have explained online shopping to someone from the year 1950. For online shopping, something we take for granted today, didn’t exist then. 

Why? Oh, simply because the concept of ‘online’ was not there!
Everything was offline, everything had to be seen, touched, and smelt before you took a decision to buy it. And you could pick just the stuff you wanted, fruits that were not more nor less ripe than you wanted them, vegetables that were as crisp as they looked – stuff you cannot do online when all you get is a representative picture, which always shows things to be better than they really are. In many places you could even bargain to get a reduced price.

I wish we could have online barbers who could give us a haircut and online spas that could massage our tired backs that have got all achy sitting all day long in front of the computer. Maybe we’ll get there one day. Who knows? Now the masseurs come to your house to massage your back.

How Has the Internet Changed Shopping Behaviors?

Before online shopping, and indeed before the advent of supermarkets, people tended to seek the shopkeeper’s advice on what was available, what the product prices were and where the products were kept in the shop. Usually a shop assistant would rush to the shelf or cupboard where the items were kept, and bring them to the counter.

Quite a bit of the customer’s work was done at the counter itself. The work had to be done quickly. Sometimes in haste. For there were others waiting impatiently in the queue behind.

With supermarkets, there is no such tension. People usually wander around through the aisles, looking at one label here and checking out another there, usually pushing a cart in front and dropping selected packages into the cart as they navigate the large shopping area.

Now, in both these situations people have to step outside their homes or offices and walk to the shops. The traditional retailers are likely to be closer to home. The supermarkets are often much farther away.

And then there is the problem of carrying purchases back home. If customers have their own cars parked nearby, there is no problem. Just dump the purchases into the boot (or trunk) of the car, and drive off, or go do something else, like sit at the nearest restaurant and have a snack and a cup of tea or coffee.

We still do that – walk or drive to the local grocer or vegetable or fruit vendor or dairy outlet and pick up things we need immediately. Or, when we are out on a walk and see something interesting in a shop window, we cannot help but walk in check it out.

Today’s consumers rely increasingly on the internet to help them place orders and ensure that they are delivered to their doorsteps.

That’s a big change from spending an hour or more getting out of the house, navigating through traffic to the supermarket, and going shelf to shelf checking out stuff, loading the shopping cart after figuring out the most suitable combination of quality, volume, price and discounts, then waiting in a long queue to make the payment, and then getting back into the traffic to get home.

But it’s more than just avoiding all that hassle.

Internet shopping helps you find choices you didn’t know existed. Supermarkets did that too, but you get a great deal more on the Internet. You get to see many new products whose very existence you were not aware of.

In fact, this is what e-shopping websites do to us. They lure us into buying things we hadn’t thought of buying a little earlier, before we saw an enticing image of something we fancy having, or the image of something we had forgotten about but wish to buy now before we forget it again.

There are disadvantages too. For example, you cannot get customized stuff. In the past, you could walk into a carpenter’s shop and order furniture exactly the way you wanted it.

A chair with a straight back and a cushioned seat, or one without a cushioned seat. Or a chair with arms or without, and straight or curved arms or legs, and so on.

The carpenter would never say, sorry, sir, ma’am, sahib or memsahib, but you can only get curved arms and straight legs here. They never said that. They would craft a chair the way you wanted it, often from a book of designs from which you could select what you wanted the carpenter to make. You got whatever you want in the sizes you wanted.

With online shopping, you do get a great deal of choice – but you cannot ask the online market to customize the product according to your preferences.

But there is the price advantage, which is another very big advantage with online shopping. Most of the time, you get discounts on branded products because the big online stores have the bargaining power to compel sellers to reduce prices.

So why do sellers sell through online marketplaces? They do it because it helps them rack up sales much faster than from the street shops.

The expansion of online shopping has also been one of the reasons for some older and established retailers having to down shutters. 
The Covid pandemic that began in 2019 and resulted in over 6.7 million deaths only exacerbated a deep malaise in the offline retail industry.

Among the hundreds of big name retailers those who have had to shut down are names like Sears, JCPenney, RadioShack, Toys ‘R’ Us, Brooks Brothers, Diesel, and Neiman Marcus.

There are predictions now of a bigger spate of shutdowns in the offline retail industry, as online sales rise further, pushing out the brick-and-mortar offline stores.

I don't want to dismiss future expectations in a few sentences. So I aim to return with more detailed discussions of the online shopping world – with some statistical information and more information about the various players in the market.