Blog #1 - Analyzing External Strategic Environment

I have always been interested in e-Commerce, and have constantly been intrigued by how online businesses have increasingly defeated traditional brick-and-mortar stores of which many have declared bankruptcy. The retail apocalypse was interesting until we've seen how some retail businesses have managed to sustain, sometimes thrive, within the midst of the eCommerce invasion.

We know that malls are shutting down, certain department stores such as Sears and Barney's have either declared or are on the verge of bankruptcy. It is intuitive to think that online shopping is a superior alternative, but does this necessarily mean that retail is dying? Certain questions regarding the current climate can help us assess the situation: why did Amazon acquire Whole Foods? Why do Costco members still renew their memberships? Why are TJ Maxx stores increasing?

According to PolyMatter, a YouTube channel that constantly assesses the current economic climate claims that Costco's competitive advantage against Amazon lies within customer's satisfaction of bargain hunting. When you go into a Costco, you get lost within the abundance of offers and products and hunt down the isles until you find a good deal. The feeling of getting a good deal physically gives a sense of achievement rarely found from shopping online. The same can be linked to Ikea's furniture assembly process, people get a sense of achievement from building their own furniture.

While is has been somewhat exciting to see how the internet has disrupted the retail industry that forced many retailers to switch to online, it is worth noting that businesses who started out online are now opening up retail stores. A good example of that would be TheRealReal, a luxury consignment store that began online and has now opened two stores in Los Angeles and New York. In an interview with TechCrunch, TheRealReal's CEO reasoned their retail stores from having successful pop-ups. Certain factors like consumer awareness of the fast fashion industry and how it negatively affects the environment can also be linked to TheRealReal's expansion.

It is not clear what the cut-off point is with regards to when and how traditional retail outlets shut down and move to online, or when an eCommerce business opens up retail stores. Thus, it is worthwhile to note that a sole-online economy does not seem to be within the radar for now. The retail apocalypse seems to be intuitive in the current tech era, but it is uncertain how that will play out in the future.