Things change, and change often occurs so gradually that you don’t notice it until suddenly everything seems different, and you wonder how it got that way.

In the retail sector, we see some amazing changes happening. The convenience store that once added gasoline pumps out front created a quiet revolution. Today, almost all convenience stores come with gas pumps and almost all gas stations come with convenience stores.

Are drug stores going to follow?

The current trend in drug stores is to stand alone and not always be part of a shopping center. Pharmacies are bigger and expect higher sales per square foot, but the drug store business is changing underneath them.

Traditionally, the high profit sections for drug stores have been the pharmacy sections and the photo development areas. That, too is changing.

In early November, USA Today ran an article about pharmaceuticals on the Web. USA Today was concerned about security. From a business standpoint, the real issue is not security and who may abusing the system. The issue is that many common products, in addition to prescriptions, are being sold over the Web. Some people even buy product subscriptions such as premium coffees and dietary supplements online.

With a virtual pharmacy, the cost to the consumer is lower, the delivery is overnight and the physician can post your prescription by e-mail. After you take out your first prescription, your insurance records, history, number of renewals, doctors’ name, and other relevant information is stored in a database--and you don't have to wade through traffic to pick up your medicine. If you need regular medications, or if you have a long-term prescription, this is the cost effective mechanism for you. Of course, you don’t get the interaction with your neighborhood pharmacist, but that is pretty rare these days anyway. People will always trade conversation for a lower price.

If large numbers of consumers begin buying prescription medicine over the Web, what happens to a drug store's high profit pharmacy center? Is the photo department next?

Although they are still fairly expensive, digital cameras are becoming more and more common. If you just had a printer that connected directly to the camera, you could produce your own prints at less cost and in less time than the 1 Hour Photo section. You could make copies for all the relatives too.

If the photo section and the pharmacy section are no longer profitable, what differentiates the drug store from the convenience store? Maybe more magazines.

At a recent gathering of retail folks, one person commented that research indicates women prefer going to the stand-alone drug store for convenience items instead of the convenience store/gas station. This was due, perhaps, to the lack of beer and lottery ticket customers at the drug store. The women's primary concern was safety, which has got to be a little disconcerting for the oil companies who have worked very hard to make their units islands of safety and light.

If we take away the photo section and the pharmacy and have the same products in both drug stores and convenience stores, what is the net difference between drug stores and Wal-Mart, except groceries, variety and size?

Could it be that we are moving to further consolidation of retail just as we see consolidation of banks, restaurants and geographic data companies?

There are clues that this is already occurring.

In my town, there is a brand new Wal-Mart. On the back of a Wal-Mart you expect to find one of those quick oil change places. My new Wal-Mart has its own brand of oil change service. Some Wal-Marts even contain a mini-McDonalds. My new Wal-Mart has its own 1950’s theme restaurant. Not the old cafeteria that you used to see in Kmart, but a theme restaurant with a neat old jukebox and some cool pictures of ‘57 Chevys and T-Birds.

The Advent of Stuff, The Enterprise

If there is coalescence in the product range of various retailers, an interesting thing to ponder is the possible major mergers that may occur.

How about a major merging of Amoco, Wal-Mart and CVS? Perhaps a marriage of Kroger,Texaco and Eckerd? How about Safeway, 7-11, and Chevron?

While these mergers would be awesome, they could be perceived as much more fun with mergers like SaveMore, TruValue, Unilever and Fox Theatres (STUF) or Starbucks, Union Oil and Phillips Petroleum (STUPH again).

The big mergers may be coming, and if there are only a few independents left standing how we be able to tell them apart from plain vanilla retail?

The validation of all this came the other day, when I got and e-mail from Scott Elliott with the URL of “Stuff Inc.” Could they be the future? Are they ahead of the curve? After all, I guess it’s all just stuff.