Of Storefronts and Kitchens

This clever management book I read long ago talked about three attributes for a business to succeed. Location, Location and Location; it proclaimed. But that was a long time ago.  

Looking at some of the successful businesses that I buy from today, I count Flipkart, Amazon, Bookmyshow, BigBasket among the prominent ones. I know nothing about their Location. Yet they deliver me books, movie tickets, groceries and all the trivia I need. I get to see a variety of the offerings, compare prices and have everything at my doorstep too.  Satisfaction is no less than the one I had visiting stores in old days.  The way we buy has changed substantially and permanently. A brick and mortar storefront looks no longer necessary.

The virtual storefront that’s somewhere-out-there looks as pretty, as appealing to our buying senses, and is as complete in its presentation on the browser. Nothing is left wanting. A tangible real estate expensively done-up looks no longer in vogue.

So let's see where this could go.

Urbanization a few decades ago and going the the traditional way, had placed a lot of emphasis on real estate.  Starting 70s, Real Estate became the focal point of businesses; large and small. While the Location Location & Location phrase traces its origins to 1920s, it was starting four decades ago, that its impact was felt as never before. What assumes a focal importance also naturally attracts speculators. Speculation perception of the times led to the asking price and rental of commercial Real Estate blow out of proportion.  The mere viability of businesses was then precariously perched on the real estate bill.  A startup business of those times had no leeway for growing-up misadventures, nor a support to condone the early mistakes a startup would make.

As we stand in the present times, hopefully the shift of focus from the material to the virtual storefront may take away the undue stress on the geographical location and infrastructure. The diminished importance of Commercial Real Estate would in turn drive out speculation, and the economics of balanced supply could kick in. Businesses can now become viable without having to worry about the Real Estate monster consuming a major part of the resources.

Bringing in this ease of buying to our rather crowded lives, have we humans lost out on a few things? A major criticism I have come across is that the tangible sense where people go outdoors, see each other and do business one-to-one is lost. Matters become too virtual, impersonal and confined to the indoors. What happens also to the vibrant urban space where humans talk, walk and laugh together?

Hopefully the reduced Real Estate price pressure will make those tiny business nooks you used to see around the corner viable again. The tea shack and the quaint little bakery will blossom again, serve people, and do well. There will only be a few of them around however, with majority of the big business moving online.

Having fewer shops and establishments in the neighborhood is a welcome thought. This way, commercial establishments will not crowd the living and breathing space so dearly required by an urban human to move outdoors and meet other humans at length, leisure and peace.

With the changing perspective of businesses, a business owner's focus is shifting from the storefront to the proverbial kitchen. Logistics, supply chains, lean management is already the talk in consumer businesses as much as in the non-consumer ones. I hope to write about it on another day as a sequel to this post.