Since at least the arrival of railroads, retail markets in the United States have trended toward standardization and massification. Sears Roebuck & Co., Atlantic & Pacific Tea Company exploited the railway's potential for efficient distribution of large volumes. Sam Walton expanded the size and number of his stores along the network of late Twentieth Century highways.
Amazon is, arguably, the same retail strategy organized around the "Inter-network" provided by modern telecomputing: the glories of the Sears catalog multiplied and expedited for a new technology.
But, at least in the US and other "advanced" economies, we may be nearing the close of comparative advantage derived from the having more and more of the same product-lines at lower prices.
Instead of massification, product curation is emerging as a key differentiation. Certainly this is -- perhaps has always been -- the strategy of the very high end. The strategy is turning down-market.
Last week Whole Foods announced it would go head to head against Trader Joe's with new smaller format stores. This is an early skirmish in a battle for the future of urban grocery.
Soon to appear in affluent urban/suburban neighborhoods near you: many more Aldi's and the first North American Lidl's. Like Trader Joe's (owned by the same German company that owns Aldi's) these stores will carry no more than ten percent of the SKUs as a traditional supermarket. But these are SKU's that are in high and sustainable demand.
Last week also saw A&P re-enter bankruptcy, probably for the last time. The banner that founded no-frills cash-and-carry in 1912 is dying, even as it's original customer-facing format is the new rage. But it is a format with a radically new back-end.
Soon: And more customization.
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