Out to the sales today? Or go online and click the search buttons?
We all like a bargain and this week sees the traditional way of trying to get one: the sales that half-started yesterday and get into their stride today. But this festive season has also seen a huge advance in online shopping, a change in our habits as significant as that spurred by the spread of supermarkets a generation earlier.
Like the supermarkets it is a global revolution of course, but this is one that is arguably more advanced in the UK than any other large economy: for example we buy a higher proportion of our books online than Americans.
It is a revolution that is profoundly democratic. It shifts power from producers to consumers and indeed from governments to consumers. And it is a revolution that has only just begun, for while we can see some of the practical changes, it is much harder to grasp the social consequences of these.
To see why, think back to the world before supermarkets. People shopped for food daily, going from one specialist shop to another, using the advice of the shopkeeper on what to buy. Now people shop for food once a week and rely on the display to enable them to select what they want, or persuade them to do so.
The advantage of the supermarket is partly lower costs thanks to the scale of their distribution, partly saving time (two hours a week instead of about five) and partly the increase in the variety of goods on offer.
There are disadvantages, of which one of the most troubling in that a tiny handful of huge groups has enormous influence on what we eat. But I think by and large that power has been used responsibly and there is an active consumer lobby keeping the supermarkets in line.
The most interesting effects of this shift of our food shopping habits, however, are the social changes that have resulted. For example, you can lament the decline in cooking and the advance of prepared meals (though to judge by the popularity of cookery books, that is on the turn) but thanks to the latter we have a much more varied diet.
Now think of what is happening to non-food shopping. Until the internet came along the changes in non-food shopping were much less dramatic. There were a few key innovations, such as IKEA's invention of the flat-pack, and self-selection developed with, for example, the DIY warehouse. But bookshops, department stores, chemists and so on all remained - indeed still do - pretty much the same as they were in the 1950s.
That is now changing. Take those three examples, bookshops first. Every year the percentage of books bought on the internet creeps up: it is now in the high teens. This has not killed bookshops, for the market has expanded and specialist bookshops have used the internet to sell globally. But it radically changed the way we think about books, which wonderfully have become an even more important mechanism for exchanging and exploring ideas. There are more book titles published in Britain than ever before (and more even than in the US). Self-publishing has risen, because it becomes easier to distribute a specialist-interest book.
We may even reach the stage where most books, not just reference books, are principally published online and only people who need a printed version would get a physical copy. Everyone who wants to can become a published author, with global distribution of his or her work. Already blogging has democratised writing. This would be a further level of the democratisation of ideas.
Now take department stores. Brand matters and so too does display. This Christmas, John Lewis has had better on-line sales than ever before but apparently what people most like to do is look around online, compare prices ... and then go into a store to have a look at the product.
As shopping goes global brands have to go global. I was in the Mall of the Emirates in Dubai last week, the world's third largest shopping mall (the one with the ski slope, which we duly test drove) and almost the first thing you see is a branch of Debenhams. If you want to be a global brand you have to be there.
So the internet does not destroy department stores any more than it destroys bookshops. It does not destroy shopping malls. What it does is to help top branded stores achieve a wider reach than they would otherwise be able to achieve, provided they keep up their showcase outlets. And it means that malls are not just about shopping (which you can do in the internet) but about the whole leisure experience. You cannot ski online.
But as I said, we are in the very early stages of this revolution. We are in the position of supermarkets in the 1950s. So we have only just started to catch a glimpse of some of the consequences: the importance of branding, the growth of viral marketing, the squeeze on prices on any product that has become commoditised, but the cementing of the position of iconic brands.
We can see some problems for retailers: how do you stop the "wrong" people (i.e. the people who might devalue the image) buying your stuff? But we cannot see the whole picture. We just know that if global prosperity continues, a world of infinite information means that consumers will become more powerful and anyone selling to them has therefore to work harder at entertaining them as well as just selling.
And chemists? Well, anyone with an e-mail account will have been spammed with invitations to buy this or that drug online. We have not seen a global commoditisation of prescription drugs yet but we are heading that way. This may not matter so much for chemists, which are moving into selling services (beauty counselling, cosmetic surgery, private GPs, etc) instead of goods. But it will change the pharmaceutical giants, whose margins are already under pressure. Insofar as the internet irons out global price differences it will squeeze down the price of prescription drugs all around the world, with consequences that we can only guess at.
You see, it is not the internet on its own that changes retailing: it is the way the internet interacts with other social and economic shifts. Supermarkets changed food retailing because it was associated with the growth of car ownership and suburban sprawl. The internet will change general retailing because it is associated with the globalisation of the economy. If it shifts power to consumers, which I'm pretty sure it does, those consumers will not just here but could be anywhere in the world.
That, surely, is wonderful: a global democracy of consumers, voting with their money for the best products and driving the providers to do better. And if you can't bear the thought of hitting the sales today, stay at home and hit the screen instead.Reuse content