THE FUTURE OF RETAIL IS BIGGER THAN AMAZON.

• Author: Matzko, Paul
• Position: ECONOMICS

AMAZON WILL BE responsible for nearly half of all e-commerce in the United States during 2019. Critics such as Sen. Elizabeth Warren (D-Mass.) allege that the company "squash[es] small businesses and innovation." They believe government antitrust action is needed to save retail from being totally subsumed by Prime memberships and brown boxes. Yet their dystopian vision fails to account for the boutique retail renaissance simultaneously happening in cities around the world.

Stores selling a single product category, such as butcher shops or model train stores, used to be common, but this pattern of shopping disappeared as first big-box and then e-commerce retailers started offering a vast array of goods at lower prices in a single location.

There was much handwringing over the trend away from specialized retail, but as Philip Oltermann observed recently in The Guardian, a new wave of small retailers is popping up in cities such as Berlin. Oltermann visited a shop selling nothing but live ants and ant terrariums, many designed by the 30-something proprietor himself. It operates as a showroom, a place to display boutique products that are then shipped from off-site to the consumer, thus saving money on retail space and inventory overhead.

How is that store able to compete against Amazon, which sells ant farms at a lower price point? The key is that it bridges the gap between online and offline life. When you order a terrarium from a seller who is clearly obsessed with his own product, you're buying that person's expert knowledge in addition to his unique wares. Contrast that experience with buying an ant farm on Amazon, where the expert is replaced with an algorithm and a...