As Britain’s ability to manage post-Brexit trade goes under the microscope, so do global comparisons with the economic conditions and protectionism of the Depression era. A dip into the economic writing of that era is long overdue on my part. The points of comparison are striking.
Keynes’ concern about “unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour” echoes down the decades and into the present debate about “The Future of Employment: How Susceptible Are Jobs to Computerisation?”
Writing not long after Keynes, Schumpeter noted, “In the case of retail trade, the competition that matters arises not from additional shops of the same type, but from the department store, the chain store, the mail-order house, and the supermarket, which are bound to destroy [them] … sooner or later.”
The shifting face of retail and the survival of stores hit home to me, not least as consumers are suffering most in the U.S.-China trade war, and what hits the consumer hits the retailer. The precarious situation of present-day retailers is highlighted in Retail Research’s “Who’s Gone Bust in Retailing.” Unsurprisingly, the report makes for sobering reading: In 2019 alone, 27 names are listed.
Online is today’s obviously different type of store, but its separation from the traditional bricks-and-mortar store is continually being eroded by omnichannel. The launch of IKEA’s planning studio concept in city center locations where products can be experienced but not purchased points to the evolution into experience-led retail.
Experience-led retail is increasingly becoming a differentiator. In the case of one furniture retailer, an augmented reality app enables customers to visualize products in their homes before they buy. Deloitte’s Retail Reinvented highlights that new experiences, along with innovation and redefining convenience, will be key to 2019 retail success.
Since Keynes observed 100 years ago that “an inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep,” retail has changed considerably. And yet I think it is fair to say of retail that the more it changes, the more it’s the same thing. Certainly, convenience of ordering, product variety, and rapid delivery all exercise retailers today. This blog series looks at each of those three topic areas, as well as the current Brexit-dominated trading context.