I couldn’t wait to share this article by Greg Satell at Inc. Online about how opening physical retail stores is becoming somewhat of a hot trend all of a sudden.
It seems that in a digital world, physical stores have become a thing of the past.
Yet if that were true, why are Apple, Amazon and now even the Coca-Cola Company investing heavily in retail locations? For every announcement of closures and divestments, there seems to be a similar announcement of investment and rebirth. Some firms, it seems, are learning to love the retail apocalypse. —Greg Satell, Inc.
Aside from the fact that this supports my own feelings that the death of retail is greatly exaggerated, this story kind of mirrors some of my theories concerning factory automation.
One of Greg’s points is that an unintended consequence of the “Retail Apocolypse” has resulted in cheaper rents for smaller retailers. The smaller retailers have benefitted greatly from some of the bigger players exiting primo retail spots. This is reminiscent of what is going on in the manufacturing world.
Automating factories feeds three trends. First, product prices will go down due to greater efficiencies and volume. Second, there will be a consolidation of large companies. And third, there will be a reduced product breadth offered by the large companies.
The second trend of reduced large companies and the third trend of reduced selection is good for smaller manufacturers who can’t afford to invest in robots. These small companies will also get better lease deals on physical locations and they will have reduced competition on the lower volume items that the automated factories can’t afford to produce at less than scale.
Yet if that were true, why are Apple, Amazon and now even the Coca-Cola Company investing heavily in retail locations? For every announcement of closures and divestments, there seems to be a similar announcement of investment and rebirth. Some firms, it seems, are learning to love the retail apocalypse. —Greg Satell, Inc.
Aside from the fact that this supports my own feelings that the death of retail is greatly exaggerated, this story kind of mirrors some of my theories concerning factory automation.
One of Greg’s points is that an unintended consequence of the “Retail Apocolypse” has resulted in cheaper rents for smaller retailers. The smaller retailers have benefitted greatly from some of the bigger players exiting primo retail spots. This is reminiscent of what is going on in the manufacturing world.
Automating factories feeds three trends. First, product prices will go down due to greater efficiencies and volume. Second, there will be a consolidation of large companies. And third, there will be a reduced product breadth offered by the large companies.
The second trend of reduced large companies and the third trend of reduced selection is good for smaller manufacturers who can’t afford to invest in robots. These small companies will also get better lease deals on physical locations and they will have reduced competition on the lower volume items that the automated factories can’t afford to produce at less than scale.
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