The year 2010 may already be here

Discount Store News, May 5, 1997 by Jennifer Negley

The year 2010 is much closer than it seems. A child born today, for example, will be just entering high school by 2010. But in retailing terms, it's got the potential to be as different from 1997 as 1997 is from 1984.

Just how different the retail scene will be 13 years from now is something the think tank at Anderson Consulting sat down to contemplate a few months ago.

They envision four scenarios:

The Mega-Retail world. Consumers spend more time working, but have less disposable income. Electronic and on-line retailing have not really caught on. consumers want retailing formats to be consistent,reliable and reasonably priced. Each market is dominated by a lone mega-retailer that "does everything to accommodate the shopping experience." Stores, while huge, are easy to navigate, and product information is abundant, much of it provided by touch-screen information kiosks.

One-stop shopping reigns supreme. Department stores have added commodity goods, mass merchants have added upscale goods and while there are far fewer stores overall, the amount of total U.S. retail space has remained stable.

The Main Street World. The U.S. population has grown increasingly diverse and the total consumer profile is highly fragmented. electronic retailing has not been embraced by a significant percentage of households, and while retail stores remain the leading shopping arena, consumers have rejected mass-produced, one-size-fits-all product offerings. They have also abandoned mall shopping and demand the convenience and intimacy of neighborhood shopping.

Almost a mirror opposite of the Mega-Retail World, the Main Street World model consists of much smaller, more tightly niched stores clustered in neighborhoods. These stores are highly specialized, placing a great deal of emphasis on customized assortments and personal service. They use state-of-the-art in-store databases to profile and respond to each customers' habits and needs. Although large retail corporations still exist, their stores have individual identities tailored to the neighborhoods they serve.

The Technological World. Technology is pervasive and has been fully integrated into daily living. Convenience is assumed and service becomes a differentiating factor, whether it's delivered by on-line ordering, phone, fax or electronic catalog. Delivery takes a few hours rather than days, and value-added services such as film development and dry-cleaning pickup are part of any local customer's retail service package.

Retailers and manufacturers now link directly with consumers, and the winners are those that have developed sterling brand reputations. Retailers have taken private label offerings to a new level through partnerships with secondary manufacturers, and leading manufacturers use the vast amounts of data they have developed on consumers to create well-defined, targeted brands.

The Retail Web World. consumers demand that individual retailers offer them service through a variety of channels, including on line phone, catalog, television shopping and store shopping.

Retail stores no longer devote a large amount of real estate to commodities; those are delivered to the home through electronic ordering. Instead, stores have become entertaining and interactive. By controlling the supply chain, retailers use an array of service offerings to build their own brand identities.

While anderson Consulting can't predict which world will ultimately prevail, I can tell you this: They're already here. As you read through this issue's special report, Great Ideas in Merchandising, you're going to find that the seeds of all these futuristic worlds exist in some of today's most interesting retail formats.