Two Disruptions that Weren't

Two large, consumer-facing sectors have had their ups and downs over the past decade, but heretofore neither has been “disrupted” in the way that Linux, Skype, and Google News dismantled existing industries.


Despite its unquestioned status as an innovator and a leader in customer experience, Amazon historically hasn't been credited with business model disruption on the scale of Napster, Skype, or online brokerages like E*TRADE: That situation may change. While major retailers, including Target and Wal-Mart, appear to be weathering the current economy reasonably well, and many stores may be in for a wave of changes, to date retail looks a lot like it did 20 years ago.

Four overlapping forces appear to be at work to change retail, two of them moving extremely rapidly: economics, demographics, mobility, and social media. Taken together, these powerful waves of change are creating new opportunities, threats, and leaders in a well-established industry.


Consumers have less money to spend, particularly on discretionary purchases. Three main drivers come into play here.

MORTGAGE EQUITY From 2000 until 2008, Americans withdrew more than $40 billion of mortgage equity per quarter, riding an updraft in housing prices to turn that change in market value into vacations, cars, or kitchen renovations.1 Now equity is increasing: People are investing more in their mortgages than they are pulling out. Foreclosures certainly skew this number, ...

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