Most retail outlets assume a traditional three-stage consumption model. The customer experiences a need, shops to satisfy the need, and then consumes or uses the product purchased (I need shoes, I buy shoes, I wear them).
But retailing today is less and less about control of the shopping experience because there is no longer a clearly defined shopping stage. This paradigm shift is apparent in three ways:
Instant purchasing
To begin with, consumers increasingly transact right when the demand (need) occurs. Today, when you discover in the shower that you have run out of hair conditioner, you can order a new bottle through Amazon Prime then and there. And tomorrow, perhaps, when you’re watching a streamed movie or browsing Pinterest, you’ll will able to point and click on a character’s suit or tie and buy it right away — without ever going to a retailer’s site.
Automated purchasing
We’re increasingly seeing many types of product being purchased automatically — Amazon’s Dash button is an obvious move in this direction. The move to “intelligent” products is another. The latest generation of Whirlpool washing machines, for example, can autonomously order a pre-specified amount of washing detergent after a set number of cycles. Especially for fast-moving-consumer-goods, this development will also significantly push non-store based sales.
Subscription-based purchasing
The growing popularity of subscription-based platforms are also undermining the primacy of the store as the main customer touchpoint. In categories as different as music (Spotify), video (Netflix), transportation (Zipcar), underwear (MeUndies), and razors (Dollar Shave Club) a subscriber can either pick conveniently and immediately from a broad selection at the moment of need, or simply sign up and receive a regular delivery — without engaging directly with any other intermediary.
In this environment, shopping becomes an ambient activity that is executed everywhere (at home, on the go, at work, in leisure) and anytime. In addition, all steps in the entire cycle of “need occurrence,” “shopping” and “actual consumption” become more and more naturally integrated into the daily mental and physical routine of consumers.
In a digital economy, then, there may be relatively little need for stores as we traditionally understand them, and the retail business will change to reflect this new reality.
(Source: HBR)