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With The Ghost of Boo.Com Finally Banished, Is Software Now Eating


The Rag Trade? By Joe Haslam


E


ven by the standards of Silicon Valley, where dramatic predictions are as common as hot


dinners, to say that “Retail is Dead” is still quite shocking. What, you mean dead dead, not just say, resting? Yes, that is what Marc Andreessen of Venture Capital firm Andreessen Horowitz recently told PandoDaily’s Sarah Lacy. His argument runs as follows; “Retail guys are going to go out of business and e-commerce will become the place everyone buys. You are not going to have a choice.”


Previously, Andreessen, who is most associated with Mosaic (one of the first Internet browsers) and later Netscape (the IPO that started the dot com boom) attracted significant attention with a WSJ essay on August 20, 2011 titled “Why Software Is Eating The World.” Here he predicted that “We are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of


20 entrepreneurcountry


the economy.” Reading the comments (444 and counting) many people were so jolted by this that they missed the arguably more important part of what he wanted to say. Without investment in education and infrastructure, we will not realise the benefits of this innovation as quickly as we could. Having worked for four years as a Disruptive Innovation consultant, you would perhaps expect me to be an enthusiastic proponent of “Retail is dead.” Quoting Andreessen further: “Retail chains are a fundamentally implausible economic structure if there’s a viable alternative.


You


combine the fixed cost of real estate with inventory, and it puts every retailer in a highly leveraged position. Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves. There is fundamentally a better model.”


As well as the case studies we have of how iTunes killed record stores and digital cameras killed processed film, I see in my own life how my behaviour is changing. I now automatically get the epub of books and not the paperback. Instant gratification is a big part of it. The Economist comes online at 6pm on Thursdays whereas I only get the magazine into my hand when I get home from work on Monday evening


- that is four days later. So is clothing really any different? Will software and the internet eat it just as it ate books, CDs and photos? Go ahead and say this time it´s different, but for Borders, HMV and Kodak those turned out to be very, very dangerous words.


Primark


My reluctance to welcome our new silicon overlords has everything to do with following the entry of Primark, the UK & Ireland fashion chain, into Spain, Portugal, Germany and the Netherlands. The scene in my local Primark on the first Saturday


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