The Traditional Retail Model Is Officially Dead; I Blame Percy Spencer and The Microwave Oven.

Store_ClosingLast night, Paypal CEO Dan Schulman proclaimed to Mad Money’s Jim Cramer that for the first time in retail history, Black Friday online sales outpaced brick and mortar store sales. More people shopped online than in store.

Is it true? I have  no clue, but I assume Dan Schulman knows and wouldn’t lie. Plus, as he pointed out, “Paypal is in the middle of a digital revolution that is happening right now. The world is moving towards mobile right now. The distinction between offline and online is blurring.”

And I get it. Once upon a time, open street markets gave way to physical stores that specialized in selling merchandise to an ever expanding marketplace. Rather than make the people come to the market, take the market to the people. Eventually these individual stores started clustering, which evolved into shopping centers that were typically located in far away areas that consumers traveled to (a destination). But then the population boomed and the people surrounded the faraway malls. So the malls evolved into lifestyle and community centers. The people and the markets became one, and what could be better than that?

And then along came the Internet and the ability to order virtually anything you want from your phone or laptop or desktop computer – or even a phone. No need to go anywhere; a truck or a drone or someone can bring your stuff right to you. And as consumers, there is nothing we like more than getting what we want, when we want it, where we want it, the way we want it (look up “millennial” in the dictionary). And for all this, I blame the microwave oven, the accidental offspring of one Percy Spencer, who showed us that we could heat up or cook virtually anything in a fraction of the time traditionally required. And boom, we created a planet of impatient consumers on a seemingly irreversible quest for instant gratification.

So there you go, the brick and mortar store is dead. Long live online shopping. Well, sort of.

As it turns out, not everyone has the desire or wherewithal to use the Internet. According to Pew Research, more than 40% of senior citizens in the US do not have Internet access. More than 20% of African Americans and 19% of Hispanics do not have Internet access. More than a third (34%) of adults who did not finish high school do not use the Internet. And more than 25% of Americans with household incomes below $30,000 do not use the Internet. And as for the world going mobile, turns out only 64% of Americans have smartphones, which means 36% do not. And of that 64%, many do not have Internet access.

“One in five American adults do not have broadband access at home, and also have relatively few options for getting online other than their cell phone.”

That’s a lot of people. Plus there are those who may actually want to keep shopping in a physical store. And then there is the very real possibility of an EMP event that will shut down the Internet. I guess what I am saying is that we are once again transitioning, and retailers – both online and in stores – will need to adjust. As Bert says in Mary Poppins:

Winds in the east, mist coming in. / Like somethin’ is brewin’ and bout to begin. / Can’t put me finger on what lies in store, / but I fear what’s to happen all happened before.

Jim Sweeney

Jim is a veteran of the agency industry and the founder of Sweeney. He is uncommonly passionate about the idea of creating and implementing insanely great marketing campaigns that achieve insanely great results. He pioneered the full-service, full-circle agency model and continues to forge new ideas in an ever-changing industry. And he is accessible to everyone about anything, seemingly all the time, serving as a mentor to all agency personnel and clients.