On the surface, this already seems to be quite a familiar future, with a familiar set of litanies (“shopping will be freed from the confines of physical space”; “all shopping becomes social”; “mobile will be the ultimate disintermediation device” etc). That’s not to say they’re not true, but there are plenty of other blogs where you can find this sort of thing.
We wanted to understand the patterns, to identify a coherent theory to explain the effect of technology on the evolution of retail (this would also help make sense of some of the more familiar visions of the future in a more systematic way). To do this, we went back to first principles about how the system of retail works and how it might change, basing some of our thinking on the TRIZ model of the evolution of technical systems. The theory and evidence on the TRIZ model is complicated – engineers and inventors have spent whole careers understanding it and applying it – but in essence it can be used as a way to understand how systems and their components evolve over time, from rigid, to modular, to programmable through to autonomous states (you can read more here). One simple analogy might be the evolution from a single toy brick (rigid), Lego (modular – can be combined and moved around in the system, albeit not dynamically), to Lego Mindstorms (programmable – components in the system can communicate with each other dynamically), to an automated artificial intelligence Lego system (autonomous – components respond themselves to changes in the environment).
This theory of the evolution of systems works quite well for retail. Simplistically, we can identify the components in the ‘system’ of a store as four Ps:
- People (staff, customers, suppliers and others, e.g. passers by)
- Products (inventory, display products, customizable products)
- Places (displays, exterior, payment points, ambient environment)
- Prices and information (product information, advertising, service information)
When you look at it this way, shopping really hasn’t changed that much over the last 2,000 years or so. We have gone from a ‘rigid’ state (fixed stalls dispensing one type of product), to a ‘modular’ state (department stores and big box retail with movable concessions, changeable in-store environments and more control over inventory), and we are now moving to a ‘programmable’ state.
The main technology in enabling the transition from rigid to modular was electrification. For the shift to the programmable store, the key technology will be mobile devices and a whole host of information and communication technologies (ICT) that allow data to be stored, transmitted, analysed and displayed between people and things.
What will happen when a store becomes programmable? In essence it allows different elements in the system of retail (our new 4 Ps) to communicate and interact with each other in a dynamic way. So we night see:
- data (including prices) dynamically linked to products, meaning that prices can be changed on the fly more easily (or different prices will be visible to different consumers)
- products linked to other products (meaning that you will be able to create associative tags between products to form shopping lists or unique categories like ‘Scottish’, ‘ethically sourced’ or ‘related to the life of Robert Burns’)
- places – the distributed store continues to ‘talk’ to its products about their maintenance status throughout their working life
- people (not just staff), controlling the retail environment (e.g. changing the lighting or wallpaper in store, or looking through the walls of a store from outside)
These are just some first thoughts, and I’m sure there are more. We plan to return to this subject, to develop our thinking on the idea of ‘the programmable store’, so we’d be interested to know what you think.
And the autonomus store? That might have to wait.