Reid Hoffman says bricks and mortar retail's not dead
- Cromwell Schubarth
- Senior Technology Reporter- Silicon Valley Business Journal
- Email | Twitter | Google+
Hoffman posted a blog on Sunday on the topic in response to
comments the Andreessen Horowitz co-founder made in an interview last month with PandoDaily.
"I'd bet on the pure plays in ecommerce," Andreessen said. "Software eats
retail."But Hoffman argues that it is easy to understand why people like Andreessen predict the death of physical retail. Heavy real estate costs, inventory management challenges and a high cost of acquiring physical customers all put traditional stores at a disadvantage.
"But it's a mistake to think that the offline retail industry — which currently represents 95 percent of retail buying versus e-commerce’s 5 percent — will shrink to next to nothing," he wrote.
Instead Hoffman argues that software will be used to transform certain offline retail experiences and lists startups that Greylock backs along those lines.
These include Shopkick, which helps shoppers find what they want at stores and rewards them when they go there, and Swipely, which bundles payment processing with analytics and marketing tools for local restaurants and retailers.
"In short, software will disrupt and eliminate many traditional retailers, yet at the same time enable new innovations for retailers that can adapt to the future," Hoffman wrote.
Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.
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