Retail has been one of the most influential factors drives the economy in many levels of scope, including in city and region. The function of retail sector can be divided into two, which depends on the position of it: retail sector as a tool to generate external income to the economy and retail sector as media to organize and reorganize economic development by stimulating, promoting, and also retaining the money from transactions between buyer and seller within one area (Williams, 1997). Those functions can run simultaneously considering the importance of both to the economy.
Globalization has introduced many creativities in retail business which changing rapidly in global scope since more than 50 years ago and generate more ideas within the industry and produce greater efficiency to gain business profit. Early 1980’s, the concept of ‘big-boxes’ retailing entered the retail sector with a straightforward and sharp concept: introducing a one-stop-solution for consumers, rather than go to separate retailers in different places. This idea was born to keep the business competitive and in touch with customers (Hahn, 2000). In Toronto, the big-boxes concept successfully implemented but it had swallowed the market of other small retailers especially in fashion products over the city (Jones and Doucet, 2000).
Furthermore, in Washington D.C, Haltiwanger, Jarmin and Krizan (2010) prove that big boxes had been the type of retailers with least employment but the only one that always gradually increasing, compared to a single unit, small chain, and large chain of retailers. A limited number of the job is in line with the concept of one-stop-solution which efficient in land-use with various type of product in one area under the same management. According to this fact, the new design has brought different job specification to the city and economic growth.
Despite success in the USA, this concept is unlikely to be able to success in Europe due to differences in power and rigidity of their regional planning (Hahn, 2000). In contrast, the new retail sector also has helped development in many cities in Africa, Asia, and Latin America through the concept of supermarkets. While this type of retailers often underestimated by policymakers and practitioners, it is not only niche players in many capital cities in those regions (Reardon et al., 2003).
Through the common case, we can understand that retail sector has been one of the major players in economic development on cities in many regions. As long there are demands from consumers and supplies from the producer, transactions in retail sectors will always energize the economy, and the effect will not only bring bigger value but may also create larger market shares and better innovative products. In UK creative industries, the number of employment between 1984 – 1991 rising up to 15.6%, which is the largest compared to original productions, infrastructure, and the other sectors (Hall, 2000).
Generally speaking, retailing activities through the internet, which usually called as ‘e- commerce,’ also may affect development in the environmental sectors in cities, such as efficiency in transport cost, development in global logistic chains, and pattern of urban planning. Visser and Lanzendorf (2004) define e-commerce as “an internet-based technology enabling the exchange of product, order, payment and shipping information so as to conclude one or more stages in a commercial transaction process.” In Netherland, between 1998 – 2004, the total value of e- commerce transaction rising from 41 million euro to 1.7 billions euro, which had passed the value of in-store retail by 2002 (Weltevreden and Rietbergen, 2007). This enormous increase cannot happen without a good adaptation on the core structure of logistics and accessibility in cities.
The different platform of this retailing activities also brings different way in customer interaction and settlement of transactions, which seems have affecting people behavior and the structure of business including different number and specification of the job creation in the area. Through this internet channel, it is plausible to assume that people may decrease their intention to visit the retail center because they may have the things needed without visiting the store. On the other hand, the internet also may be ‘grease’ of the retail business itself. With its speed in transferring information, retailers can provide product specification efficiently so that the customer can gain more knowledge more before making a visit. Assuming this condition will keep growing in the future, many regions will need more information system engineer rather than the other jobs which may not directly relate such as door-to-door sales.
Running the retail business may require an excellent pace to adapt and great skills in creating innovation, while a good innovation may create better products will come fastly, efficiently, and guarantee a higher chance of gaining success in the market penetration.