Shopping malls are dying… there’s even in an obituary of sorts where you can browse the fallen. There are a couple of macroeconomic trends that are responsible for all these fallen malls. The first major trend is of course the rise of the online shopper. The Amazons and Zappos of the world have been dominating traditional retail through their lower prices and convenience. The second trend I will highlight is a contraction of the middle class and a widening gap between the poorest and richest families in the US. Furthermore, as economic inequality increases, the expected level of service for the wealthier also increases. This is evidenced in the developing world where the middle class is expanding instead of contracting. For example, its not unusual for an upper-middle class family in India to employ a staff of cleaners, cooks and drivers.
Due to the “middle class valley” that is emerging in the US, it behooves retailers to cater to one of the two mountains that flank this expanding valley- either the lower class or the upper class. Best Buy is a perfect example of a victim of the valley- the online shopping dynamic coupled with the change in their customers’ purchasing power has created the perfect storm. The businesses that are succeeding now and will continue to succeed in the future are those that target the bottom (Walmart) or the top (Gucci) of the income brackets.
Circling back to the first economic trend leading to the death of the shopping mall, online shopping is popular for three main reasons:
Convenience- shop from home
Speed – shop at many stores at once
Price – shop for deals
Right now both the poor and the wealthy shop online with the same level of service (or lack thereof). However, as technology pervades our world, the wealthy will come to expect more from online retailers. Just as people rely on a personal shopper at their favorite luxury stores they will come to expect that same personalized level of service online. The question is if the businesses of today are innovative enough to see and adapt to this change in demographics and consumer behavior. In the past we have seen countless business’s fail compared to their online counterparts take a look at a few below…
So will businesses avoid the middle class valley? Will they adopt technology to provide this online personal shopping experience? Companies that fully understand socio-economic and technological trends will be able to innovate in time and stay successful. Personal shopping has already started moving online but conditions are perfect for this to accelerate in the coming years.
http://salemove.com/
Due to the “middle class valley” that is emerging in the US, it behooves retailers to cater to one of the two mountains that flank this expanding valley- either the lower class or the upper class. Best Buy is a perfect example of a victim of the valley- the online shopping dynamic coupled with the change in their customers’ purchasing power has created the perfect storm. The businesses that are succeeding now and will continue to succeed in the future are those that target the bottom (Walmart) or the top (Gucci) of the income brackets.
Circling back to the first economic trend leading to the death of the shopping mall, online shopping is popular for three main reasons:
Convenience- shop from home
Speed – shop at many stores at once
Price – shop for deals
Right now both the poor and the wealthy shop online with the same level of service (or lack thereof). However, as technology pervades our world, the wealthy will come to expect more from online retailers. Just as people rely on a personal shopper at their favorite luxury stores they will come to expect that same personalized level of service online. The question is if the businesses of today are innovative enough to see and adapt to this change in demographics and consumer behavior. In the past we have seen countless business’s fail compared to their online counterparts take a look at a few below…
So will businesses avoid the middle class valley? Will they adopt technology to provide this online personal shopping experience? Companies that fully understand socio-economic and technological trends will be able to innovate in time and stay successful. Personal shopping has already started moving online but conditions are perfect for this to accelerate in the coming years.
http://salemove.com/
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