Friday, June 16, 2006

Alternatives To Retail

Maybe you didn't hear it the first time when it was proposed in the original publication of Better Godliness Through Chemistry, but retail is economically minimal, suffers from high overhead, and alternative methods to generate more economic vitality are superior.

A cheaper and cleaner way to perform retail involves Expos, advanced internet salesforces, and same day delivery. First, the net, coz you're on it.

A majority of normal retail customers would be delighted to shop online in their own homes and bathrobes, and are technologically savvy enough to do it. There are certain drawbacks, though. You cannot 'see' the item before you buy it. Who knows when 'shipping' is going to get it to my place. And customers expect to go get the item and bring it home. These three things can be circumvented to save customers and businesses money.

Every business that is substantial has a website, and most already have net ordering protocols. Webcam for chat is growing and growing, and chatrooms are 90's business talk. Customers can see the product on webcam, even see live demonstrations by internet salesforces on webcam, and chat about it with staff and one another. Knowledgeable salesforces can perform their informative duties through a one or two way webcam one on one with customers as easily as an in person salesman.

The plus side is that we don't need a high real estate altitude showroom, nor do we need a similarly positioned warehouse. We can have people from anywhere in the country or world sell and inform about the item to anyone else, and have the items shipped locally from low-rent local warehouses that day. Instead of paying for a spot on the strip you can pay for a spot in the woods and sit there on a $39,000 multi-acre property plus warehouse and shipping team, while my tech center in California serves the customers online and correspond orders. That's the magic of alternative retail, and it will lower the price of business and increase the dignity of technical and even cam workers, while reducing commutes, saving customers time, and improving regional industrial employment.

Expos are high intensity sales weekends or events, occuring at concert halls, warehouses, conference centers, or other open spaces on select days. Heavy advertising for the event, factory direct sales, entrepreneurial opportunities, fun *classy* mall-like economic structure, without massive standing overhead or the same old humdrum doldrums. Opportunistic renting space and special event status, plus factory sales and R&D opportunities mean that this too can ring in at much lower cost than the average retail store. If you're only open and paying for it 2 days a week, but doing 7 days worth of business, everyone wins because you can offer deals and don't get weighed down. There's even room for the little guy.

The logic is this: the consumer wants ticket items regardless of when the store is open. You close at night, do you miss sales then? Few, probably not many. Because they come in the next day when you open again, unless someone else is open at 1am or the desire is passing. If the customer knows that they can get a deal at this expo, they will likely wait for it instead of going to a common retail outlet to pay more. An exciting expo is like a circus show and holds many opportunities. It's an event.

The option of same day delivery is important to customers. They want to be able to have the item almost as quickly as they could if they went out and bought it. That option must be available for a small premium that may bring the item up close to it's normal shelf price. If they are willing to wait a day or two to get it they should be receive a solid deal, maybe 10-15% more under retail price for most goods, even ticket items. Savings on staff and real estate should make up the difference.

Being able to do this in combination with parcel delivery services running on improved fuels in the wake of peak oil should lower the cost of shipping. Maglev trainsets can further reduce shipping costs and times around the country and world. The space elevator for commercial goods may do the same thing when it goes up.

These measures will spice up the otherwise unpopular world of retail and product distribution.

Note also that cross country freight operations cost about $3 a gallon of diesel to ship, and many loaded trucks receive only a few mpg. This can mean that a 100,000 mile year for a single truck could cost up to $30,000 in fuel in an unsteady market. By switching to B100 biodiesel or even B20, each truck can save thousands of dollars anually, tacking the bills right onto trucker salaries and reduced prices. That is how you beat inflation, my friends.

1 comment:

William Bunker said...

UPS could benefit from leading this shift in retail economics first by moving the majority of the packages in the created wave. We can sign agreements with warehouse-hosted net businesses or small production firms to ship all of their goods at bulk rates.

Currently I believe UPS does not work in production or computers, but modest investments along with advertisement adjustment might expand the business or create sub-company folds.

Even if UPS cannot commit to industry or computer serving, they could still provide warehouse space and correspond with net entrepreneurs such as www.garage.com or www.cambrianhouse.com.