Is Social Technology killing Retail?

Walking through one of Queensland’s busiest shopping centre just last week, on a school holiday on ‘late night’ trade, I came to notice a trend that may scare traditional retailers (although they’re probably aware of it already).

What was noticed is that traditional retailers haven’t changed in years – but their customers have. Although there were plenty of people in the shopping centre, there was no one in the stores. In some once could find 10 staff members and maybe two or so ‘customers’, a trend that was repeated through 80% of shops that were observed.

Coincidence? Probably not. when the facts were checked with http://abs.gov.au for their retail figures this year, and for the most part, since 2009, retail is on the downward turn from a flatline.

As suspected, food retailers like supermarkets are experiencing growth (people have to eat), but health awareness has left cafes, takeaway and restaurants suffering a severe drop in popularity:

So what does this mean? Can you blame it on the floods like everyone is trying to? Or should you be looking at the trends of the online world, specifically social technologies.

Group buying is a relatively new phenomenon, but already is a $63 million industry in Australia alone, and is projected to grow to $242 million this year – a tremendous growth for a relatively new technology for Australians. Who wouldn’t want to save up to 90% on things?

eBay revenue stands at $9.1 billion per year and is growing at an average of 5% year on year – an already established online shopping behemoth.

With these tools and Google at everyone’s side, it’s not that people are buying less, it’s that they’re getting smarter. Researching, scanning barcodes with their iPhone Apps and finding the cheapest place to get the item – most of the time directly from the manufacturer or a global merchant.

Yes, it has become a global economy, where people rely on other people’s technology to source things a cheap as possible. Where a small-time online store, or app developer, can generate millions in revenues just for empowering the citizens.

It’s one of the main reasons why Amazon continues to grow, while Borders is bankrupt. Why Blockbuster is a dwindling giant of the last century, while Netflix owns the new release streaming market. Why Colorado group buckles under tremendous debt, while collective fashion trends spike astronomically online.

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