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.

RELATED TERMS
  1. Shelf Offering

    A shelf offering is an SEC provision that allows an issuer to ...
  2. Takedown

    The takedown is the price of a stock, bond or other security ...
  3. Amazon Effect

    The "Amazon effect" refers to the ongoing evolution and disruption ...
  4. Click And Mortar

    Click and mortar is a type of business model that has both online ...
  5. Comparable Store Sales

    Comparable store sales is a retail store's revenue in the most ...
  6. Reverse Fulfillment

    Reverse fulfillment is the process of moving returned products ...
Related Articles
  1. Personal Finance

    Comparing Online And In-Store Prices

    While every retailer is different, there are several factors that affect where you'll get a better deal.
  2. Investing

    Activision Reacts: Actually, We're No. 1 in Sales

    Activision Blizzard’s shares have been under pressure in recent weeks amid concerns about retail sales of its latest Call of Duty game.
  3. Tech

    Wal-Mart Is Betting Big On E-Commerce In 2017

    The Arkansas-retailer will look more like an e-commerce company in the future, according to CEO Doug McMillon.
  4. Personal Finance

    Shopping Online: Convenience, Bargains And A Few Scams

    Shopping from the comfort of your couch has major benefits - and some unpleasant side effects.
  5. Investing

    GameStop Tanks on Disappointing Holiday Sales

    The stock fell more than 9% Friday after saying same store sales during the holidays fell 18.7%.
  6. Investing

    E-commerce Earnings on the Rise

    E-commerce companies reported a healthy rise in earnings. But growth has come at the cost of operating margins for some.
  7. Insights

    How To Shop At Wholesale Retailers

    Have a plan and think twice before you venture through the sliding glass doors.
  8. Investing

    Will Activision Blizzard's Stock Gain In 2017?

    Activision shares took a beating in recent weeks, but the stock may be poised for a strong 2017.
  9. Personal Finance

    Why Are Retailers Expanding Into Online Grocery? (WMT, AMZN)

    Walmart, Amazon and Target are all fiercely competing for your online grocery shopping dollars. Why now? Why is online grocery such a popular business?
RELATED FAQS
  1. How can you lose more money than you invest shorting a stock?

    Since there is no limit to how high the price of a stock can rise, there is theoretically no limit to the amount of money ... Read Answer >>
  2. How does one make money short selling?

    Short sellers make money by betting a stock they sell will drop in price. If it drops, the short seller buys it back at a ... Read Answer >>
  3. What is the difference between market capitalization and market value?

    Understand the difference between market capitalization and market value, including the elements used for the calculation ... Read Answer >>
  4. Why are there no profits in a perfectly competitive market?

    See why economic profits are theoretically impossible in a perfectly competitive market and why some economists use perfect ... Read Answer >>
  5. How do I calculate stock value using the Gordon Grown Model in Excel?

    Learn about the Gordon Growth Model, also known as the dividend discount model. See how to use Microsoft Excel to determine ... Read Answer >>
Trading Center