Retail Evolution

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Retailing is an ancient art that has been practiced from the early years of mankind. In any format, retailing involves the sale of goods and services to the final consumer. It has evolved over the years from being a form of barter to the very technologically sophisticated e-tailing present in modern days. As consumers have become more sophisticated and savvy retail has evolved accordingly.

'Bringing stores to shoppers-not shoppers to stores' is one such evolutionary trend emerging in retail. This statement by G Davies makes the obvious relationship with current trends in the retail environment. The ever changing process of retail evolution has resulted in consumers currently being wary of the traditional retail experience. Consumers want more for their money, with time and convenience being of the utmost importance.

Current retail theories which can be categorized as either cyclical or non-cyclical easily support this new trend. Both these theories allow for innovation and have concepts which drive the natural evolutionary changes evident in retail. Retailing is different from other types of businesses in that it requires attracting consumers and sufficient customer traffic to be viable. Retail business will not succeed if they can not attract customers and their ability to attract customers is not simply a function of their own business; it depends on their inter-action with other businesses. Thus, retail has always looked to foster environments where consumers are comfortable enough to return again and again.

A closer examination of the four prominent retail evolution theories, wheel of retailing, the retail life cycle, environment and conflict theory, is needed to get a better understanding of the concept of bringing stores to the consumer. Each theory demonstrates the advantages and disadvantages of this new trend.

Retail has evolved over the years in various ways. For example, in the 80s off-price retailers reflected consumer demand for brand-name merchandize at lower prices then traditional retailers. Similarly, the 90s and present day have brought a continuation of retailing innovations such as the concept articulated by G. Davies, 'Bringing stores to shoppers-not shoppers to stores'.

The way society thinks about retail is dominated by the idea that primary role of the retail center is to attract the consumer to the location. An alternative paradigm started emerging in the 90s which talked of taking retailing to the consumer either at home or in crowds. This innovative concept works around the basis that just because a crowd exists does not mean that the people in it can be easily converted to being shoppers. Time and convenience are the key factors in determining the likely levels of sales if any. Thus taking retailing to where there are people, either at home or in crowds rather then waiting for consumers to arrive. An example of this would be vending machines or the development of airport shopping or e-commerce.

The criticalness of retail to the economy and its function as a primary economic activity led various economists to study retail patterns and formulate evolutionary theories. Cyclical and non-cyclical theories were created and a closer look at the four theories within it would give a better insight into this new trend.

The common concept of all cyclical theories is that retail institutions evolve in a rhythmical pattern or cycle (e.g., low-high-low cycle or general-specific-general cycle) by adjusting their retail attributes, such as price or assortment. Two of the most well-known cyclical theories are the Wheel of Retailing theory and the Retail Life Cycle theory. The Wheel of Retailing theory is an example of retail evolution determined through the price aspect. The Retail Life Cycle theory is an example of retail competition that states that retailing institutions, like the products they distribute, pass through an identifiable cycle.

The Wheel of Retailing theory states that the...
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