There are two types of shopping. To differentiate them I will classify them as consumables such as groceries, cleaning materials and toiletries and personal and luxury items such as clothing and appliances. To date internet shopping has not superseded personally shopping for one major reason; the cost of the delivery. Secondly should internet shopping become the norm what will the role of physical shops become?
I have been a keen follower of the internet shopping from its exuberant birth in the 1990s. The prognosis was that within 10 years, the demise of physical stores would become a reality. Reality TV shows showcased celebrities attempting to survive without ever entering a shop. Doomsday predictions abounded. Even within the steel industry where I was working at the time, the death of the steel merchant was predicted.
Main picture: A worker is seen in the Amazon.co.uk warehouse in Milton Keynes, north of London
Partly due to the fantasy of an idyllic world in which no staff was required, as all transactions would occur within the ether, as impractical and a figment of the advocates’ imagination and secondly the cost of personalised deliveries was prohibitive, this vision never materialised. Leading the charge to change the shopping experience was Amazon.com. Initially confined to being a purveyor of books, CD & DVDs, it rapidly offered all manner of other goods.
Perhaps the most obvious immediate realisation was that the range of items available exceeded that which was available at one’s local store by many orders of magnitude. Whereas the local DVD store might stock 2000 titles, Amazon would stock 200 000 titles. A number of flaws were equally as rapidly evident: delivery time, delivery cost and lack of instant gratification.
Notwithstanding these snags, the purchase of these types of items using the internet rapidly became the norm.
Not so with regard to consumable items such as groceries. Nowhere has it become the norm for purchasing these items. Largely due to the cost of delivery, its adoption has been stymied.After a hiatus of 15 years, progress at last is being made in addressing this situation.
Amazon’s proposal has all the ingredients of a possible solution. In keeping with Jeff Bezos’s penchant for cutting edge technological solutions to everyday problems, Amazon is developing a drone which meets these requirements. This drone service to be marketed as Amazon Prime Air, will be able to make the delivery with 30 minutes. What Amazon fails to notify us is to which areas this will apply. Presumably in South Africa’s case, this service will not be available unless they bulk ship items to major centres and then cross-dock the articles to drones.
Another drawback will no doubt be the weigh limitation. The envisaged drones or at least the photos released so far, show a light-weight airframe only capable of carry a few kilograms at best. Would this delivery mechanism exclude bulky items as television sets or is the plan to eventually produce a range of drones with various carrying capacities?
According to the plans, Amazon’s drones will be able to update their routes in real-time. A mock-up delivery screen suggests that people will be able to choose from a variety of delivery options – from “bring it to me” to nominating their home, place of work or even “my boat” as places for packages to be dropped.
In conjunction with Audi, an innovative solution is being developed. In May, a demonstration of an automatic car-boot delivery system took place in Munich. Using Audi’s in-car communications system, Connect, DHL delivery drivers would track a customer’s vehicle over a specified period of time and then use a digital access code to unlock the boot, the car maker said. This code would then expire as soon as the boot was shut.
Personally I wish Amazon all the success in this venture but with all the technological and regulatory hurdles to overcome, do not expect this technology to be available in the short term.
Instead, a system currently being rolled out by Makro on-line in South Africa, is probably the solution to the delivery conundrum in the short to medium term. Makro plans to install ten pick-up lockers at Sasol Garages and McDonald’s stores over June and July.
According to Makro, these will operate as follows:
Those who want to use Makro’s pick-up lockers can select them as a delivery option when buying online, as follows:
- Select the products you want to buy and add them to your trolley
- Proceed to the online checkout
- Select “Locker Collection” on the fulfillment option page
- Select your locker location of choice
- Pay for your order (including the locker collection fee)
- You will receive an SMS notification when the order is ready for collection at your selected locker
- Pick-Up you order from the locker within 48 hours
- The locker collection fee is R30.
- Should you not be able to collect your order within 48 hours, Makro will cancel your order and refund you according to the payment method you used.
This is an ideal solution for a working couple. Place the order during the day and collect one’s shopping on the way home at the most convenient McDonald’s or Sasol Garage.
Where does this leave physical stores such as Checkers, Pick ‘n Pay and Spar? With the introduction of their Brand Match, Pick ‘n Pay now guarantees that a shopper will receive the lowest price on a selection of 1500 items where they capture the prices of their competitors in their system.
In this process though, Pick ‘n Pay and the future internet shopping portals has introduced the concept that has clearly been impractical for them to apply personally, splitting ones purchases based upon the price. It is not only the time consuming nature of price comparisons but also the tedium of having to travel to half a dozen shops to avail oneself of all the specials that precludes its adoption.
With these mechanisms in place, it now becomes practical to ship strictly on the price per item.
What is the future of the shopping mall? If internet shopping comes into vogue, the supermarket chains will relocate their stores onto outlying areas where rentals are low. For the malls, this development could be catastrophic. Their anchor tenants – at least in South Africa – are the large grocery stores as these shops attract customers to their mall.
Even clothing stores catering for the cheaper items, might be cannabalised by this trend as well. This could ultimately result in the closure of many malls. The cycle of proliferation of highly profitable malls as one the largest growth industries worldwide could be rapidly curtailed.
Will the mall ultimately disappear?
No. It serves other roles too such as viewing of the more fashionable clothing, a place for the children to meet their friends and a place where restaurants proliferate.
But what it will do is to prevent males from being forced to accompany their wives to the mall every weekend against their wills.
Will the wives them to use that spare time to have enjoy a round of golf instead?
Some how I doubt it!