Netscape Founder Predicts the Death of Traditional Retail

Netscape creator Marc Andreessen, who has invested in successful ventures such as Pinterest and Foursquare, recently discussed his views on the future of commerce. The tech investor believes traditional retail stores will die off, while e-commerce stores will be the only way people shop in the future. He expects a big shift in the next three to four years, a different view from those who suggest innovation in e-commerce is slowing.

“We’ve already seen this happen in some categories,” writes Business Insider. “Netflix put Blockbuster out of business, Circuit City died out, and physical travel agencies are scarce.”

But there’s one foreseeable caveat to this: e-commerce doesn’t help the shopper who needs something last minute.

“Retail guys are going to go out of business and e-commerce will become the place everyone buys,” says Andreessen. ” You are not going to have a choice. We’re still pre-death of retail, and we’re already seeing a huge wave of growth. The best in class are going to get better and better. We view this as a long-term opportunity.”

“…Retail chains are a fundamentally implausible economic structure if there’s a viable alternative,” he adds. “You combine the fixed cost of real estate with inventory, and it puts every retailer in a highly leveraged position. Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves. There is fundamentally a better model.”

“If he’s right, the big question is what this means for Silicon Valley,” writes PandoDaily editor-in-chief Sarah Lacy, who conducted the interview. “Oddly enough, e-commerce is the one sector of the consumer Web where the Valley hasn’t been particularly dominant. eBay was an exception — and not surprisingly, it was more of a marketplace than a traditional etailer. Most of the top companies this time around are in New York, LA, and even Seattle.”

Andreessen had to think about that for a moment, but eventually responded: “My core theory is that the best software companies will win at retail, so it’ll become increasingly important for these companies to have the best software programmers in the world. And there are a lot more of them in the Valley.”