The world as we know has evolved from nomadic to the information age and so has the retails distribution from the barter system to e-commerce in this information age. Let me pen down my thoughts about how the retail systems evolved, how it is carried out today, and how it’s going to be in the coming future!
Agricultural age ( before 1800 AD ):
During this age, the humans have evolved from a lifestyle of hunting and gathering in the stone age to learn to cultivate, domesticate, and settlements in agriculture age. Since many agricultural settlements came into existence with less hunting and fewer human migrations for survival and less mortality rate; there arose a need to exchange goods and services. Humans started exchanging goods/services in return for other goods/services. This system of retail business came to be known as the barter system. With time people started realizing the serious concerns this system had like pricing inefficiency and no common yardstick benchmark for price offerings, need of double coincidence of wants to facilitate trade; and since day to day needs like live stocks and grains and vegetables were perishable in nature and challenge of saving for future became a serious concern especially for service traders like teachers, poets, craft men, etc.. It was during this time that the coins were invented and used as a universally accepted form of remuneration for goods and services.
Industrial Age (1800s-1970s):
During this age we saw a tremendous use of machinery and mass production. The industrial revolution changed the way how retail business in olden days was carried out where individuals/groups used to trade goods/services visiting markets. The industrial revolution gave birth to mom&pop stores which we know as a grocery or general stores today. In these stores as we know, a customer will ask for a product and the shop owner retrieves it from the store and charges for the same. Though it was convenient in terms of easy access location-wise compared to markets in the agricultural age customers lacked the satisfaction of having to see the product first before making a decision to buy.
This gave birth to the departmental stores where each departmental store used to sell specific category goods and users can actually roam in the store feel the product and check the details before buying. This departmental store system was convenient and satisfactory but users had to go from one departmental store to another to collect all that is needed for a household.
This inconvenience has given rise to what we know today as supermarkets and shopping malls. By far this was the best experience a customer can have where everything is made available from household requirements to fashion to restaurants to entertainment centers.
UPDATE 1 : I forgot to mention the franchise system of distribution where a proven successful formula of business would be sold to interested distributors for a royalty plus all the supplies would also come from the franchise owner. Best examples are McDonalds, KFC, etc..
With time humans as we know tend to be lazier and lazier and that’s what drives innovation I feel. So people wanted to visit the shopping mall for the sole purpose of their leisure and entertainment but they needed household items to be home delivered and this was made possible with the information age and the innovations in digital technology.
Information Age ( 1970 onward ):
This drastically changed how we do retail business today; with the advent of technology and firms gaining credibility and trust in terms of quality and delivery, online e-commerce gained a tremendous foothold in the retail business. I for example prefer not to visit a store for my grocery needs since I know the quality would be good unless I am buying from an unknown brand. There are many different forms of retail business models using information and technology today. To name a few we have telemarketing, TV Shopping, e-commerce, direct selling in the likes of Udemy, Unacademy, LinkedIn Learning. etc. has enabled individuals or solopreneurs to earn without leaving the comfort of their homes. This doesn’t stop here the future is going to be all about Consumer Value Creation and Innovation.
UPDATE 1: The recent Facebook and Relience deal, not to mention is to bridge the gap between the products and services Reliance has to the distribution channel which the Facebook has the power to create using its existing user database of WhatsApp and Facebook users. This model of direct to customer selling plus e-commerce will surely give a hard time to platform based businesses like Amazon and Flipkart in the coming days. JioMart launched on WhatsApp
What’s the future?
With any change comes resistance and so was the case with the industrial revolution and so is the case with today’s information age; but remember change is the only constant in this universe and with time people will tend to adapt, adjust and accommodate. From grocery stores, markets to shopping malls, from insurance selling of door to door to telemarketing and e-mail marketing, in-person classes to online classes, and amid this COVID-19 pandemic the giant likes of BMW opting to sell the cars on-line, many Bollywood movies opting to release their movies on digital platform skipping theater release, many local stores deciding to sell their services and goods online, worlds largest cab company not owning a single cab, the list goes on…
UPDATE2: Comparison of traditional businesses v/s businesses leveraging the technology innovations.
Most of the traditional business close up in first few years because of very high working capital or running cost and not able to cope the expenses.
| Kind of expense | Traditional Business | E-Commerce or business leveraging digital innovations |
| Seed Capital | Very High | Negligible |
| Working Capital | Very High | Low |
| Infrastructure | Very High | Very Low |
| Man Power / Other resources | High | Low |
| Risk | High | Low |
Few links about the recent changes I saw:
The BMW Contactless experience
Akshay Kumar’s Laxmmi Bomb to arrive straight to digital platform
Local Grocery Stores going online
Disclaimer: These are my own views from my experiences and not be considered as facts, you have all the freedom to agree or disagree 🙂
