It’s the economics. How big? The numbers don’t matter as this is a few hundred billion dollars at stake and most big retailers, commerce companies and others in the ecosystem are being disrupted! That is exactly the next opportunity and current ecosystems don’t have the DNA and business models, whether offline or online. This is what we are working on at as a team in the Peace Lab at Stanford.
1. First Mile is the next Mile! ~ neighborhood mom and pop stores are the final battle for consumer commerce
2. Omnichannel is key ~ Mobile, online and BAM
3. VED (Vital) costs are going up ~ Real-estate, labor, Energy, Distance, etc.
4. Fragmentation of Demand-Supply chains ~ Greater than 90% of all demand and supply is small MOQs/EOQs
5. Intermediation ~ key to First Mile consumer
Impact:
1. Centralization moves to Decentralization
2. Big shrinks to small. MOQs/EOQs
3. Inventory Stock Turns/Cash Conversion Cycle/GMROI are still the battleground, with greater focus
4. Hyperlocal/Omnichannel/Inventory, no time to stand still
Why Wal-Mart Needs to Build Much Smaller Stores
http://www.businessweek.com/articles/2014-02-20/why-wal-mart-needs-to-build-much-smaller-stores#r=hpt-ls
Target Tries to Find Its Place in the Big City
http://www.businessweek.com/articles/2014-01-09/target-other-big-box-retailers-find-city-stores-can-be-a-challenge
The writing on the wall is clear. APIs that drive the next battle for omnichannel small holder commerce are the same;
1. Cash Conversion Cycle
2. Stock Turns
3. GMROI
WHY MARKETPLACES ARE EATING INDUSTRIES!
The battle for the mobile internet is being fought “OFFLINE” and the battle is for “Offline Inventory” that connects to “Mobile-Centric Markets”. The API for the next battle is hyperlocal marketplaces where the API is all around “Inventory”
http://gerardjrego.com/2013/12/29/why-marketplaces-are-eating-industries/
Marketplaces are eating industries. That is the opportunity. Not being the BAM retailer itself. The key is inventory!
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