The evolution of retail formats shows that the development was due to the environmental factors and social factors that enticed retailers to shift to another format that is more relevant to the current times. Retailing evolved in stages known as disruptions, where retailers were competing on three levels: share of space, share of mind, and store layout and design.

The original state started with Specialty Stores, where higher service, higher inventory and higher local knowledge were presented. The first disruption was with the development of Department Stores. Prices and service lowered, but the main importance was to get the right product at the right time. At the time when Department Stores where located in major cities, Catalog Retailers enabled rural free mail delivery and money-back guarantee to compensate the lower services. A second disruption that marked retailing was the development of Malls. 

People were automated, so they could drive to the destination they required. The consumer however got smarter, empowered, knowledgeable and difficult to reach and technology paved the way for Discount Department Stores that offered a lower service at lower prices. One’s possessions became the basis of constructing, maintaining, competing and at times defeating other’s selves. Consumer warfare was used to describe this behavior. 

Finally, the internet caused the fourth disruption. Internet Retailing negated the importance of location, and instead, offered a wider range of assortment at lower prices, and hence allowed the right product at the right place and time. Taking Internet retailing to the next level allowed retailers to set higher prices combined with exceptional services.

Consumers are looking for more memorabilia from held experiences. Retailers provoke the emotional connections by developing places where guests can visit for hours and spend more money as much as they spent time. Customers are looking for an experience, retailers create one-on-one experiences and communicate through guerrilla retailing and marketing. The innovation in retail shifted the relationships amongst the channel members, thus a co-operative versus individual behavior.

In fact, the chain of supply moved away from imposing goods and services on the market. Businesses today value consumer’s requests and needs and strive to fulfill them in order to secure sustainability on the market. Blogs and comparison sites have become hubs of information exchange, where customers talk about brands and their offerings, share their opinions, try the products and review them. Brands have been also communicating with their customers, and asking them to share, “tweet”, “tag”, “review” their products because they understand the value of information that customers can trickle up. Communication between the brand and its customer base is inevitable.

Economic, social, technological and organizational factors are critical in shaping the use of retail space. Along comes the consideration of seven parameters: price, service, trade area/location, store design/layout, product mix, promotional decisions and organizational decisions. The acceptance or rejection of change in the existing shapes of retail trade depends on the rapidity with which change may impact the marketplace. Existing retail institutions offer a relevant scheme for categorizing the dominant theories of retail change, and provide a direction for future development. Instead of attempting to encompass all of the marketplace traits, the proliferation of retail change was a response to particular events.

This article was written by Ghalia Boustani and was based on references from the following authors:

 (Alexander, 2002) (Woodhead, 2008) (McNair, 1931) (Fitch and Knobel, 1990) (Zola, 1883) (Alexander, Benson and Shaw, 1999) (Savitt, 1999) (Christensen and Tedlow, 2008) (Burns and Warren, 2008) (Taylor, 2006) (Wilson, 2005) (#iamhuckster #retail #gboustani #marketing #popup #ephemeralretail )

Interested in pop-up retailing? Read Ephemeral Retailing. Pop-up stores in a postmodern consumption era, by Ghalia Boustani.