The information revolution is gathering pace in awesome style. Judging by an IDC survey of 50 senior directors, 96% of companies are consequently making or planning to make changes in their businesses and technology. Two-thirds have already done so, with retailers surely among them.
In particular, the shadow and promise of the Internet hang over shopping. In the US, trade in goods and services via the Net is already worth $7.8 billion and should multiply eightfold to $105 billion by the Millennium. In Britain, the same trend is under way. Plainly, the sweeping changes now afoot will change the face of shopping and retail management alike.
The most obvious change is the surge in on-line shopping. One of the most successful web sites, Dell Computer's round-the-clock store, now generates a tenth of Dell's vast turnover. But Dell also represents a more powerful trend still: the elimination of the middleman. Selling direct, the Dell-type operation cuts out retailers and distributors alike. The Net adds more muscle to a threat which can only intensify.
Many retailers have recognised the danger and taken sensible steps like opening their own experimental shopping sites. Home delivery will become huge, paradoxically using the newest technology to recreate the shop-to-door service of an older era. In bookselling, the Net is well on the way (with both Waterstone's and Dillons now joining in) to becoming the largest means of purchase.
The traditional retail management structure, with its hierarchical pyramids, is ill-suited to this new world. But the technological revolution also offers the chance to create flatter structures, linking everybody in stores and head offices on Intranets. All can share, not only information, but ideas, expertise and experiments - instantly, and in real time.
This collaboration will be badly needed to exploit the still uncertain (but vast) potential of on-line shopping, and to develop enticing store formats and operations that will tempt shoppers away from terminals into real shops. Since newcomers will certainly grab rich shares of the new electronic markets, that's a challenge to which established retailers must rise: or else risk redundancy.
