The third generation of retail will be characterized by hybrid organizations that combine the best of e-retail with the best of traditional bricks-and-mortar retailing. According to the Harvard Business Review article, prognosticators such as John Quelch, dean of the London Business School, believe that hybrid retail, may work "for supermarkets, wholesale clubs, and retailers that offer a great assortment of mostly low-end merchandise." Others see a broader role for hybrid retail, in which retailers of products that buyers must see in person before they buy view their physical stores as the key channel for acquiring and building relationships with customers and where Web sites are set up as fulfillment channels, organized to handle repeat orders at a low cost.
The purpose of this article is to compare and contrast physical retail, e-retail, and hybrid retail across a variety of dimensions. These dimensions are based on a model of a retail system that considers both the customer's purchasing experience and the retailer's fulfillment processes. The results of this analysis are used to explain current developments and forecast future developments in how retail businesses adapt to e-commerce.