Let me pose a question which I will answer in parts. Why do we go to stores to shop?
Sure, for the past 10,000 years, man has journeyed to a marketplace to trade for goods and services he needs. But why now, with the Internet, Amazon, Buy.com, Cars.com, eBay, etc, do we still go to Target, Wal-Mart, Staples, and Kroger?
I think that there are only a few motiving factors as to why a person would want to shop in a store rather than from a website.
Knowledgeable Sales Force, Post Sales Support, First Hand Evaluation, and Instant Gratification.
First, Knowledgeable Sales Force. There is the perception that if you walk into a store, the person in the store will have some knowledge on the products they sell.
Next, Post Sales Support. There is a perception that having a physical location provides better support should you need to return the item you have bought. There is also this sort of odd perception that if you have a problem, having physical people you can go to and try to reason with face-to-face will somehow net you better results than doing that same reasoning over a phone.
Next, First Hand Evaluation. There is a perception that by simply looking, touching, and feeling a product, a layperson can make an informed judgement on what product to buy.
Finally, Instant Gratification. When we want something we want to be able to get it right now.
I see these obstacles to online shopping as being mostly theoretical and/or irrational, and as these fade, so to will the era of large retail stores.
We have seen a consolidation over the past 20 years into ever larger “warehouse” like stores. These have the advantage of being able to concentrate goods thus lowering the price but have this disadvantage of commodising the workforce which runs these stores. I think it’s very sad when my Grandparents say “just ask the nice boy/girl at Wal-Mart, they can help”. For the most part if what you want to know is on what isle you can find a box with a UPC code on it, then the “nice boy/girl” can help you. But if you want to ask a technical question, say “which new TV has the best high light visibility” or “Which food product has the best nutritional value”, the poor Mc-Jober is going to be totally lost. This is because that these warehouses via there pay and disposition do not encourage their employees to take an interest in familiarizing themselves with the products.
Now I know that there are MANY people working in these environments which know a great deal about the details of the products they sell, but these people are the exception, not the norm, and as time passes we will be less and less likely to trust the opinion of the person in the blue/red/green vest, because we will no longer see them as collectively as knowledgeable.
Now, as we come to realize this lowered expectations of the workers in these warehouses, we will seek advise from experts. These experts will of course be mostly in the form of on-line groupings of people (wikis, forums, etc) who come together to share information about products. As people come to trust these online communities they will in effect come to distrust their own “gut” when it comes to purchasing decisions. People will always have a personal preference for this or that bath soap or paper towel patter based on an irrational element. But when it comes to larger items, even things as lower as $50, why not take a moment to consult the wisdom of the group, and buy based on that.
This lack of expertise on the part of the sales forces is also why post-product support is almost alway handled by simply exchanging the defective product for one that works, or getting a refund. If your new TV from Wal-Mart breaks, you can take that TV back to Wal-mart, but there not going to fix it, their just going to give you a new one. This is no different than any on-line retailer.
The next logical step for these warehouse stores is to move from big locations to GIANT regaional ones, or even a single national location. Actually the best model is that of Amazon, which does not nesasaerly stock products but ships and cross ships from manufactures. Rather than have customers come to the store, the store will come to them, via UPS and Fedex.
As far as Instant Gratification, I think that for the most part this need for instant gratification is a human failing and a weakness to our culture. It leads to irrational and ill-considered decisions. Never the less, this need is almost a religion in out society.
Ultimately it will be price kill the need for Instant Gratification. The on-line world is a truer fair and free market. Because you eliminate the physical location aspect of the supply vs. demand model, buyers and sellers find the right (and lower) price point across the word.
There is also a legitimate need for things needed “right now”, such as personal items, first aid, medications, etc. In this regard perhaps not ALL retail stores will go away, but they will be reduced to the sort of local pharmacy / convenience stores we see now.