2010 marked the starting point of the evolution of retail and all the changes that were to come by 2023. However, going no further beyond 2020 - the year that spiraled a global crisis of COVID-19, an economic spiral, the entire shopping landscape shifted globally.
Making predictions of what 2021 would be like, it was relatively clear that COVID-19 will shift stores toward online retail.
When comparing the past decade, it was only the last 3-4 years that played a major role in transforming the way retail has been operated. That is to say, these past few years have rapidly digitalized the world.
Nevertheless, the rapid growth in e-commerce brought about numerous opportunities and benefits. On the contrary, it brought just about enough threats to retailers as well.
When someone mentions “retail,” the most basic definition that can come to your mind is - simply selling products or services to customers to make a profit. However, retail goes much deeper than that.
If you expand upon the definition, retail also consists of selling those products and services through multiple channels. Therefore, retail is also the sale and purchase of goods on online platforms.
Retail has a rather expansive definition that continues to evolve with each era and the introduction of new channels for selling products and services.
If you are a baby boomer or a millennial, then you have lived long enough to witness the evolution and transformation of retail over the years. If you recall your childhood, you’ll notice the retail you have available right now is completely different from what you remembered.
Even if you are Gen Z, you have witnessed the digitalization that occurred after the pandemic. Nevertheless, here’s a quick overview of the history and evolution of retail.
During this period, “Mom and Pop” stores were made; these were owned by families and classified as independent businesses.
The spirit of “Mom and Pop” stores pioneered the way for department stores that started to open in the US and evolved as time passed by. It was the success of department stores that laid the foundation for Bloomingdales in 1861 and Sears in 1886.
In the year 1883, retail was growing, and James Ritty, who was a saloon keeper, thought of a way to increase efficiency for retail store owners. Therefore, he invented the first cash register. At the time, it was named “incorruptible cashier.”
With time and globalization, days were becoming busy, and keeping cash on hand was becoming harder. During the 1920s, charge cards, which were later named credit cards, were made.
As businesses started to flourish and retail stores became more popular. The first mall was built, which was fundamentally only a plaza that housed different retailers. This shopping mall was established in Kansas City in the year 1922.
When people fell in love with the idea of malls and the social enjoyment they brought, there was more evolution to come. The first Walmart was set up in the year 1962 in Rogers City, Arkansas.
As advancement in retail became more rapid, and the space started to reduce, the idea of e-commerce became more popular. In 1995, Amazon was made, and at the time, it was only an online bookseller. However, by the year 2018, studies on online retail showed that the income far exceeded 10 billion dollars.
Facebook, which everyone is familiar with, became the first and most successful online social media platform. With millions of online and active users, it was inevitable that it would soon become a channel for retail, given its reach. Recent studies have shown that approximately 90% of companies and organizations use social media as a channel to reach their audiences.
E-commerce continued to flourish and generated a staggering amount of revenue that broke all previous charts. The jump depicted how e-commerce grew from withholding 5% of the retail market to 15% in only a few years.
Retail has shifted significantly over the years. However, accounting for only the past decade and technological advancements, studies show that retail changed in the five following ways:
1. Shoppers are becoming more aware, and businesses are becoming transparent.
2. Retailers have the opportunity to personalize suggestions and ensure sales.
3. Smartphones became a means to drive consumers to stores and turn them into frequent buyers.
4. Consumer opinions started being heard and determined the quality and cost of goods.
5. Augmented Reality (AR), 360 views, and interactive advertisements enabled consumers to view every inch of the product they are buying right on their smartphones.
The way retail has changed dramatically over the last few years is incredible. With globalization, on the one hand, it is inevitable that consumers are going to become more aware of what they are buying and be able to submit feedback and have it addressed. However, physical stores continue to lose the ratio against e-commerce.
Nevertheless, times are changing, and survival requires adaptation. E-commerce is a more evolved state of retail shops. Given the world is becoming busier every day, it is a more convenient manner of shopping.
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