Retail 3.0

The Continuous Evolution of Stores and an Industry

 Lee Peterson

Estimated Read Time: 4 Minutes

Once Upon A Time

If you think about it, it's hard to believe how much retail has transformed in the past 50 years. Before this incredibly fluid half-century, retail was pretty much stagnant for hundreds—if not thousands—of years. The corner store, the bakery, the ice cream shop, the neighborhood tailor—these businesses stood the test of time, passed down through generations, creating a 'merchant society' that provided thousands of people with a foundation of guaranteed work for themselves and future generations. These were also places for consumers to go through Maslow's Hierarchy from top to bottom at their whim.

This was Retail 1.0. (*For a peek at what U.S. retail once looked like, visit Europe, where in most small burghs, retail life is still a lot like it was ages ago: simple in form, function and purpose.)

Sure, department stores came along at the turn of the 20th century, but at a local level, they were little more than a small bump on a large highway (albeit a harbinger of things to come). They were a place downtown, where everyone went once, maybe twice a year —perhaps to admire the Christmas decorations or marvel at the abundance of goods under one roof. But in the vast majority of U.S. towns and cities, little changed. The local businesses were too deeply embedded, too entrenched to be displaced. Then came the first mall in Minneapolis and it was a downhill slide from there.

The Blow Up

Here in the U.S., the home of innovation and head-spinning cultural change, the self-sustaining, old-world model of retail described above… blew up. Pockets of retail yore still exist, but for the most part, retail in the U.S. looks completely different than it has for centuries in just about every way possible.

Malls and strip centers popped up literally everywhere. Big box stores appeared at every highway exit while local bakeries and shops all but disappeared. This happened seemingly overnight. The carpet-bomb quickness of this metamorphosis is a coffee table book waiting to happen, especially regarding the scale with which it all went down.

And now? After 50 years of a mega-retail blanket covering the country, there's been a few 'wait a minute' moments where having a 'neighborhood bakery' or a 'local coffee shop' are such novel ideas that they seem fresh. And they're doing well for the most part. In other words, the shock and awe implementation of 'mass' retail is causing a retro backlash to the times before the last fifty years. Hello, 1951? But it is still a small and tenuous movement right now.

For now, we're still firmly entrenched in the Retail 2.0 era—an era that scaled mass retail to extraordinary heights, yet is often too big to change. Every technological advancement has been funneled toward operational efficiency rather than customer experience. The result? A landscape of sameness: stack 'em high and let 'em fly.

Buy, Buy, Buy?

And so, here we are. We went from a neighborhood corner store to 2.1 million-square-foot shopping centers with 300 versions of those same corner stores…only to find ourselves inching back toward something smaller, simpler.

Retail, in hindsight, has gone through a typical American bubble. But upon further inspection, this past retail tornado of a half century was / is a global phenomenon, fueled by the old 'Robber Baron' mentality of "enough is never enough". It was fueled not only by the Retail Barons of the world but by the fickle consumers themselves. Who are now questioning whether there should be stores at all. Wow.

The term 'consumerism' rose up from the malls, big box stores and e-com and is on us like a lead weight, perhaps never to cede. Consumerism is now what drives our economy and is a force in the direction we're all headed, like it or not. We are all consumers at a level our predecessors would've gasped at, just as most of us are gasping as we look at the 'stuff' surrounding us and wondering what to do with it all.

So, What Is Retail 3.0?

Which brings us to the big question: What's next?

Where does retail go from here? And more specifically, what happens to stores?

We've seen an explosion, an implosion, and now, uncertainty. Does the 'local' movement have enough steam to dominate retail? Or is there something else on the horizon?

With over one million stores out there in the U.S. alone, we thought we should ask consumers what they think is next—because after all, they're the ones driving this shift.

• Will mass brick-and-mortar retail disappear, leaving only online shopping in its wake? (If you look at a graph of online sales this century, you'd be inclined to think so.)
• Or will physical stores adapt, reinventing themselves into something entirely different?
• Could we be headed back to a world where small, locally owned stores dominate retail once again?

As every famous explorer announced at one time or another, let's find out.

Here's a sneak peek at our latest research: When we asked over 2,000 consumers what features they want in the store of 2050, the #4 choice was No Checkout—allowing shoppers to simply "walk out" for seamless transactions. Stay tuned for more Wayfind articles as we dive deeper into the evolution of Retail 3.0, uncovering insights that shape the future of the industry.