Tipping Point of Retail and the S-Curve

"What is this tipping point thing that you want to talk to people about what is a tipping point?"

Stephen Semple: So a tipping point happens when something's going along, and it's kind of minor, and it's kind of a background thing, and it grows slowly. Then it hits this point work explosion explodes and takes off, and suddenly something comes from being moved from being a minor thing to being a mainstream thing, and so that's the tipping point. The tipping point is when change happens, and the growth curve goes from being flat to being almost straight up.

Gary Bernier: Is this the s curve that we're always talking about from the technology industry. I'm familiar with the s-curve, but are you saying that it's applying right now to this particular situation and retail.

Stephen Semple: Yeah, and the s curve is applied to technology, the s-curve as referring to things like radial tires. The S curve has happened over and over and over and over again. And as well documented and if you want to read about it. The book "The Diffusion Innovation." A five hundred page book that goes into massive depth on it. But yes, it's the whole idea of the s curve that that that's just the way things grow and it becomes pretty predictable.

Gary Bernier: Interesting. So what research have you bumped into that makes you think we're at this tipping point for retail?

Stephen Semple: So, the tipping point occurs. When something hits 12 to 15% market penetration, that's where the tipping point lives.

And we go back to December of this year, so December 2019 and this data comes from Visa, Mastercard, and Facebook all confirm a similar number 15% of retail sales were conducted online. So in December of this year, for the first time ever, we hit the tipping point, the tipping point happened, and online retail is poised to explode.

Gary Bernier: Is anything that we're currently dealing with in our, you know, we're recording this April 2020, providing fuel to that fire is being that little bit of an accelerant is like providing that spark.

Stephen Semple: Yeah, if anything, one could argue this change is going to happen faster in terms of the acceptance of online retailing because of the events that are happening today.

People who've never shopped online before shopping online,
People who shopped online or shopping online, more are getting used to this idea of buying online driving to the store and picking it up.

The world has changed, and the longer this goes, the more this becomes the new habit. One could argue that not only are we at the tipping point. But we're at the tipping point right when massive fuel has been added this to the fire of change.


Gary Bernier: Cool. So, where does that lead us now? What part of the s curve. Are we about to take a journey on, and how long is that going to last.

Stephen Semple: If you're looking at the s curve, the prediction. Is this the amount of time it takes to go from zero to 15% is the same amount of time it takes to go from 15% to maturity, which is around 85%.

The first online transaction happened 25 years ago, a few years later, you know, Amazon opened, and eBay opened, and you know PayPal was developed, and all this stuff happened, but the first transaction, it's 25 years ago 25 years from zero to 15 which means 25 years from 15 data 5%
but not only that, it says about a dozen years from now 50 to 60% of transactions will be occurring online, and if anything, this might happen faster.

Gary Bernier: Cool is. Can you give me an example or two of some businesses that you can see in the marketplace right now that are poised to take advantage of this that people can look out as models?

Stephen Semple: And this is where it gets fascinating because

Just because transactions are conducted online doesn't mean there's no use for brick and mortar, and there are some exciting companies right now that are combining the experience too. So one, for example, is Canada Goose. So Canada Goose makes your thousand dollar puffy coats winter coats and are popular with millennials. If you're on a university campus today, you see tons of these coats.

So here's what happens when you go to a Canada Goose store. They have no inventory for sale.

You go to their store, but what they have is every style every cut every size. So you go to the store, you can try it on. They've even taken a step further, and you could go sit you can those sitting in a freezer standard a freezer trying the winter coat step into the freezer. Make sure it's warm. Make sure it's the right fit.

And then if you want it, you order it online, and they get shipped to your home. You don't take a cold home, but this actually makes for a superior shopping experience because guess what's our biggest frustration when we go to a store. Oh geez. We don't have your size guaranteed your size is always there.

Gary Bernier: And the color you need to make your decision.

Stephen Semple: Right.

Recorded April 17, 2020