What is The Infinite Shelf
The infinite shelf is a term for the virtually unlimited extent and range of products available in e-commerce stores, as opposed to physical stores. The infinite shelf, as its name implies, is effectively limitless; it doesn't need to consider space, so it can carry a wider range of products, larger products and higher quantities of each product.
BREAKING DOWN The Infinite Shelf
The infinite shelf can refer to any number of online retailers; however, in the world of e-commerce, it most commonly refers to online grocery suppliers. These suppliers range from behemoth international corporations such as Amazon to smaller domestic suppliers such as the UK's Ocado, which has three automated warehouses, or customer distribution centers, allowing the company to continue taking market share away from some of the UK's larger traditional grocery stores, according to a 2018 Reuters report. While these online retailers already greatly outsell their physical counterparts, they are quickly expanding and reaching ever wider ranges of product.
Currently, personal care, including beauty supplies and pet care products, have the highest percentage of industry-wide online sales. These products tend to have high enough price points to generate an ideal profit online and they are not easily perishable. E-commerce is currently most active in Asia, particularly in South Korea and China.
The Appeal of the Infinite Shelf
The infinite shelf offers convenience to the consumer that physical stores simply can't. In addition to offering a broader range of products, infinite shelves allow customers to make purchases at the click of a button. It's quick and easy, and goods are conveniently delivered.
More expensive products generate exponentially higher profits when sold online, so from the manufacturer's perspective, it's beneficial to sell higher-priced items through e-commerce.
For the retailer that sells the goods, the infinite shelf opens up the possibilities of what can be sold, regardless of storage capability in an individual store or warehouse.
Limits to the Infinite Shelf
Some industries are more easily adapted to e-commerce and the infinite shelf, while other products face obstacles to online sales. Lower-priced items in particular face a barrier to e-commerce, as they don't generate profits through online sales as rapidly as higher-priced items. Also, items that are extremely delicate or require a specific temperature, such as perishable food products, are harder to sell online – delivery endangers these conditions, and it's often safer to simply purchase the product in a physical store.
Overcoming these obstacles will impact the future growth and prevalence of the infinite shelf, as e-commerce is currently only able to serve a portion of the market. However, industries with products that can withstand delivery conditions and are sold at high prices will continue to flourish and grow, as the convenience and profits benefit both the consumer and the manufacturer.