All around the globe, our high streets and shopping malls are changing. The 1980s and 90s brought with them the promise of bustling shopping districts with enormous variety, but as the internet began to establish itself at the outset of the millennium, the future of the high street was already beginning to look uncertain.
This process is variously known as digital transformation, and it speaks to a shift towards favoring online services over the physical ones we’re all familiar with. With the global e-commerce sector enjoying staggering growth year on year, shopping malls across the world are closing their doors, being demolished, or undergoing huge redevelopments.
The value proposition simply isn’t there anymore, though it should be understood that this isn’t all bad. It is leading to high streets and town centers to redevelop experiences that the internet cannot duplicate, like bars, music venues, and restaurants. But why exactly has the process of digital transformation been so successful?
Variety at Scale
One of the key driving factors behind the rise of e-commerce services lies in a key hidden virtue of the digital landscape. Simply put, whereas a physical storefront or venue must contend with the very real restrictions placed upon it in terms of space, this is not an issue for digital platforms. Consider, for example, a large department store like Walmart.
The biggest examples of this type of store, known variously as supercenters or hypermarts, can stock over 120,000 unique items on-site. While that is certainly impressive and will ensure that the vast majority of people shopping at such a store will likely find a product to meet their requirements, one need only compare this with the inventory hosted on its biggest digital rival, Amazon, which stocks over 12 million products – one hundred times more.
It bears noting that this is ultimately a false equivalency, not least because Walmart itself has an enormous online footprint, and any item from that digital stockroom can be sent to a brick-and-mortar store, it is, however, illustrative of the huge difference in variety that can be offered by online platforms. This is likewise born out in the entertainment sector – for example, the world’s largest casinos can host upwards of 200 table games, though many of these will be duplicates in order to facilitate players accessing the games they’d like without having to queue for them.
Naturally, online casino gamers will face no such problems, as the nature of digital products means multiple people can access the same website or game simultaneously. What’s more, leading online casino platforms such as Vegasslotsonline have distinguished themselves by offering a truly staggering selection of slots, with as many one their single platform as one would expect to find down the whole Las Vegas strip. All told, this gaming provider hosts upwards of 16,000 individual slots, and with 1 million individual users visiting per month, it’s apparent that access to, and appetite for, this digital incarnation of a classic brick-and-mortar experience, is in high demand.
Unbeatable Price
There are estimated to be up to 24 million unique businesses trading online today. As we discussed above, this offers an incredible degree of variety to consumers, but it also confers other advantages. One key example is that this huge global marketplace means stores and platforms must compete with worldwide trends on pricing.
Whereas in the past, if you went to a physical store that specializes in a specific category – say, for example, televisions by brands like Philips or LG – that store would ultimately be at liberty to charge you whatever price it wanted for its products, knowing that there are no nearby rivals to compete with. That picture changes markedly when one suddenly has to compete with millions of potential rivals.
This competition ultimately pushes the price down on products, which translates to savings for consumers, further driving the process of digital transformation. While one may suppose that having to compete in this larger marketplace means tighter margins for online stores, they are able to recoup many of these losses through being a digital operation. After all, a digital store needn’t have to foot the bill for lighting, heating, rent or local licensing, enabling them to run much more efficiently – and thus competitively.
