Retail dying away.

• Part I
• Part II
• Part III
• Part IV

The Black Box:
Future Logistical Scheme
for Goods Distribution

In the broadest sense – including retail or anything.

So we have a city with a population of one million or more.
A big and cheap hangar on the outskirts – a storage hub of the required capacity.
Order pick-up points: in the city itself and in the agglomeration.
A vehicle fleet sufficient for supplying the latter from the former.
The distribution business (DB) proper loop includes only the hubs and transportation.
The pick-up point are run by external small businesses (franchisees) or under agency agreements with big distributors, own-branded.

The DB’s payroll includes no sales personnel, telephone operators, account managers, financial officers, analysts, accountants, smart guys from the ‘development departments’ and other persons whom it is no problem to replace.
The management includes no humans at all.
Homines sapientes continue working ’in the field’ as warehouse men/drivers until their substituting robots reach the
commercial operation stage (this may take 3 to 7 years). After a while, all operational personnel will be eliminated.

Communication with all kinds of counterparties goes on exclusively through the website (or its future functional analogue). Plus an API for third-party applications.

And, despite the absence of hundreds and thousands of natural intelligence beares, the ‘black box’ will provide its customers with services at both volume and quality levels that are currently unattainable. And, instead of an Artificial Intelligence, something vague to the point of being a mere advertising concept (intellectual-like automation can be made as gimmicky as possible here), it will be powered by a multi-level loyalty programme as the model evolves.

The multi-level bonus system’s setup parameters are so selected as to provide resourceful and active participants with good
earnings. After a while, the DB will surround itself with a colossal army of freelance promoting sellers possessing some remarkable properties:

• free: because the MLM costs are built into this business model from the outset (and are one or more orders smaller than the costs of keeping a classical sales infrastructure) and are INDEPENDENT of the number of participants or levels in the system;
• active: because they are off the payroll and ‘reap what they sow’;
• highly motivated: with the passage of time and growth of their own segment in the network, the same efforts bring more and more money, and investments of working time become super-efficient;
• involved in diabolical competition: because Internet removes all hindrances to competition (geographic, temporal, racial; gender, health, of appearance-based, etc,), and thus using all the conceivable delivery channels;
• limited in their freedom and creativity by no bureaucracy, because they are self-employed sellers.

Offtopic. Beyond a doubt, after a limited period of time the sales and promotion models will evolve into creative and non-standard solutions that will be far ahead of anything currently predicted by MBA-trained sales gurus.

The network of box-like hubs will obviously be scaled up geographically to cover any number of metropolitan cities.

Important: the format described above requires NO big investment. The vehicles are taken on lease.
The ‘box hangars’ are rented cheaply (there are already too many of them in Russia, made redundant by the crisis) or specially built with quasi-bank funding and then transferred into financial leasing.
With no employees to cater to, the operational expenses are close to zero as compared to the current formats’, limited to petrol and electricity.
The IT infrastructure was already available yesterday.

Let us return to our Black Box.
This is not a fashion of speech but quite a scientific term of cybernetics: only its input (supplier) and output (buyer)
interfaces are described. And nothing else.

The interfaces of the DBs competing with each other (and in every limited market, there will remain no more than three of them, and two with a sound market position, after things settle down) will be standardized.

Like now any developer’s DBMS can interact with any third party application using standard SQL, or like the interfaces for data exchange among driveless cars from all manufacturers will be made interoperable in the near future.

But how exactly the BlackBox works inside will be its trade secret and a measure of its competitiveness.

And it will run this way until the next technological revolution. Which may take the form of either 3D printing becoming
part of everyday life, or e.g. the transfer of human consciousness into the computer. In either case, the need to distribute goods disappears altogether.

There arises the reasonable question of ‘what’s basically new here?’ Basically, not much.

But nor did Napoleon, the greatest warlord in mankind’s (known) history, invent anything new. He just made proper use of earlier developments not appreciated by his predecessors. The same was done by Ford, Jobs, Zuckerberg, and thousands of others.

So in the following publications we’ll show how the Black Box, correctly used, will change e.g. current retail. Or eliminate it, to be more accurate.

P.S. If you remember our description of a profitable e-commerce model for food retail, then the hub mentioned there may be the very Black Box that we discuss here. And the inter-competitor interface unification will enable a chain of ‘next door’ shops to work with a number of hubs at once, and vice versa. This creates an invaluable opportunity for stepping up efficiency.

P.P.S. Above we described the Black Box as exemplified by a goods distribution business – as it is simple and illustrative.

But the Black Box model is applicable to any business handling goods/services that can be standardized.