A discussion of Moore’s law and how it may be impacting the historical trajectory of retail.
One of my mentors, Argonaut Silverdog (his real name shrouded in allusion for anonymity’s sake), once gave me great advice. Silverdog once told me, “Follow your interests, whether directly germane to your profession or not. There you will find your passion.”
Silverdog was 100% right. This blog. My recent decision to leave my corporate job. My future pursuits. All these decisions can be traced back to that piece of advice. So today I share with you a nice little Weaver post that shows how my interest in history has ignited my passion to be a formative part of what lies ahead as the future history of retail begins to write itself.
The subtitle to this post is intentionally absurd — “Moore’s Law and a Discussion of the Log-Linear Relationship Between Device Complexity and Retail. I don’t even know what the hell Log-Linear means (even though I do live in Paul Bunyan territory). Absurdity is apropos though because what is happening in our industry right now is kind of absurd. It is hard to comprehend.
Moore’s law, according to Wikipedia, “is the observation that the number of transistors in a dense integrated circuit doubles approximately every two years.” Essentially, in laymen’s terms, it is what makes time travel possible.
Kidding. Sorry, I just had to.
No, seriously though, Moore’s law was an important law in the semiconductor industry, the industry that makes the microchips that power our lives today. Coined by Gordon Moore in 1965, it was a theory that predicted the industry could increase the number of components on a microchip by a factor of 2x every two years. Nearly all of the “advancements in digital electronics are strongly linked to Moore’s law: quality-adjusted microprocessor prices, memory capacity, sensors and even the number and size of pixels in digital cameras.” Moore’s law “has contributed to world economic growth in the late twentieth and early twenty-first centuries.” The law has been “a driving force of technological and social change, productivity, and economic growth.”
Now whether what I am about to posit is exactly right or wrong isn’t of consequence. What is important is that the analogy should be real enough to make us sit up straight in our chairs and see just how fast our retail industry and all the industries around us could now start to change. Moore’s law (or at least something similar in principle if you want to get technical) is hitting retail.
Here is a nice visual that shows you what I mean . . .
For centuries, early retail was the local market, the plaza, the general store, whatever you wanted to call it. Then in the middle to latter part of the 19th century, along came the department store for the city folk, and the catalog for the rural folk. Early in the 20th century, Sears stores came into being. In 1962 Walmart, Target, and Kmart got their starts. In 1995 Amazon sold its first book.
So, if you are keeping score, from a United States perspective, after centuries of the general store and mom and pop shops across the national landscape, Macy’s started it all with the first department store in 1858. 40 years later we got the Sears catalog. Almost another 40 years go by, and we got actual Sears stores for the rural and suburban populations. Another 40 years after that, we got Walmart, Target, and Kmart. And then roughly another 40 years after that, we got Amazon and e-commerce.
So historically every 40 years retail has been cycling. By that trajectory, we won’t cycle again until 2035.
But do we really think this trajectory will hold again? Is that perhaps the reason why our leaders feel so complacent?
Or is it just possible Moore’s law is now impacting us? Has digital bent the curve?
More interestingly, just how much will the curve bend too? Will it bend once and stabilize, or will there be a seismic shift before 2035 and then another major shift 10 to 15 years later? Or faster? Just like Moore’s law?
My bet is on the latter. Everything is getting faster. I just paid for gouda in a mom and pop shop with my phone. And, it was smoked.
I predict we will see major change within the next five years (if it hasn’t happened unknowingly already — voice? Amazon Go? Bonobos guideshops?). My belief though is that we haven’t seen it yet. That the something new will happen soon. Really soon. The something new will mix the cocktail differently from anything we have ever seen before.
So the question becomes, will we shape the curve or let it shape us? Will we be the shaper or the shapee? The question mark in the historical chart above is left undefined. It is our job to define it. I am excited to embark on this journey with you, the reader, each week as we explore the roads we can take to shape this curve together. Next week I will share a diagnostic tool to help you assess whether your company is ready to embark on the journey as well — whether, just like Neo, it is ready to take the red or the blue pill.
I hope today gave you some further insight into the method (my passion) to my madness for retail.
Have a great weekend and, as always, be careful out there,
P.S. By popular request, coming next week — 10 Signs from an Earnings Call that a Retailer is in Trouble
P.P.S. Prime Day is next week! Check out these exciting Prime Day deals that are already live and being passed off as news on USA Today:
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."