The Circle of Life in the Marketplace

I've been saying for many years now that Wal Mart will fall. Someday, they will be brought low. I don't know how and I don't know who will do it but there will be a day when we, or our grandchildren, tell the stories of shopping at Wal Mart, back in the day and the children gathered at our feet will not remember the largest retailer in current American history.

I've also predicted some other market shifts that have yet to come true. Yes, since you asked, I'll tell you about some of them.

Shopping online will expand way beyond today's limits. Grocery shopping has been the holy grail of online marketing and so far no one has mastered it. But it will happen. I think the first step will be an online ordering system where the groceries you select online will be "picked" and bagged and when you show up at HEB you can simply pay for and load up the groceries you've selected online. There will be a drive through window or lane that is especially for online order pickup.

When the grocery shopping happens online I believe that the grocery suppliers will either partner with a bank or create their own department to run a line of grocery credit. The revolving credit account is being underutilized in the grocery segment of our economy and the online shopping experience will provide the impetus to move Americans into using credit for buying their groceries. Dave Ramsey will roll over in his grave.

Some companies that are brick and mortar based today will become exclusively online outlets. For instance, Sears or Penneys or Dillards will grow online sales to the point that they shut down their brick and mortar locations and only be available online. I believe that they may retain some physical location but it would be a return desk or a pickup location for larger items... sort of like the old Service Merchandise pickup windows.

Some DSD companies (Direct Store Delivery) like Coke and Pepsi and Frito Lay, that provide delivery, merchandising and ordering services to the stores physical locations will be pressured by the big retailers to provide home delivery. So, when you go online and place your grocery order with HEB the Cokes and the Fritos and the Little Debbie snacks will be delivered to your door by the Coke, Frito and Little Debbie truck drivers... sort of like the milk man used to do. The rest of your HEB grocery order will come off of the HEB grocery truck or maybe a delivery service provider that is separate from the grocery company.

I also believe that it will not be long before the government figures out a way to tax online transactions. Right now, some online providers are collecting sales taxes on a state-by-state basis. I believe that will go away and Uncle Sam's minions in Congress will create a 1400 page document with 70 different formulas for calculating e-tax for all kinds of online transactions. PayPal will have to provide a W2 or some equivalent to individuals who buy/sell on eBay. Watch for the IRS Publication OT-8472, Online Sales Tax Calculations and Schedule FA, Net Gains or Losses from Online Sales Activity.

I don't view these changes with any sort of nostalgia for the old days of shopping in a grocery store (sniff, sniff) and I don't dread the changes. It's simply a matter of providing an idea and allowing the market to accept or reject it. People are working night and day, right now, to bring their idea to the marketplace. Some of those ideas will flourish. Some will fail. Some years ago a man named Sam Walton brought his ideas to the market and the market loved his ideas. Some day that same marketplace will embrace a new model or a new idea that will close the coffin on Walton's ideas. Let's all sing "The Circle of Life."

What do you think will happen?