A reader sent me this article discussing how retail seems likely to evolve. Why don’t you go and read it before I offer my comments?
The author (Doug Stephens) and I are, in general, in violent agreement about the direction and speed of retail change. We further agree that if you, as a retailer are paralyzed by uncertainty and aren’t at least trying to keep up and figure out how to change, you’re in trouble.
In my travels, I’ve come across a few articles describing some new retail ideas. I don’t know which might turn out to be “right” or “wrong,” but it seems incumbent on us to be aware and consider whether any of the ideas might apply to our businesses. I guess this is my way to help you whack yourselves on the side of your heads.
SGB Media published an article last week called, “What’s Causing the Delays in Back-To-School Buying?” Here’s the link to the article. If you read the article (you should- SGB does a pretty good job), you’ll find a discussion of the factors said to be causing the delays- the usual suspects.
I’d like to offer a different point of view. The factors they refer to are symptoms. The overall reason it’s occurring is the condition of the economy- specifically wages.
I’ve spent some years now listening to everybody bemoan Amazon’s impact on retail. Sometimes, it almost sounds like they believe that if there was no Amazon, everything at retail would be fine. As I’ve written, that’s not the case. Here’s an excellent article from somebody who agrees with me. It repeats some of what I’ve said in the past, but also puts some better numbers on the source of our retail travails. Hopefully, I don’t think it’s excellent just because he agrees with me.
You’ll have to sign up to see the whole article, but I recommend you do. It’s free and Vitaliy’s occasional articles are worth reading. You can always unsubscribe.
In early 2015, I wrote “The Evolution of Marketing & the Future Retail Model.” It’s held up pretty well. In describing that retail model, I hypothesized about how pop-ups might be used.
“Retail presence might be in pop up tents, in vans or trucks, on blankets at beaches, in a lift at a ski resort, in stores, in people’s houses. No location would be permanent. You might end up with 400 stores, but none of them would be in the same place for more than, maybe, a week. Your “stores” would be wherever your customers wanted them to be. Maybe you announce where the stores are going to be. Maybe not. Maybe there are clues online.”
Specialty beauty retailer Sephora (2,300 stores worldwide) seems to be a bit ahead of the curve when it comes to brick and mortar retail. As this article describes, they are using technology to give control to the consumer and create a “fun” experience for them. They are reducing the role of the sales person and giving the customer the power to interact with them or not. They note that their customers tend to know more about the product than the sales person anyway.
To my mind, Amazon’s biggest strategic advantage is that they started without brick and mortar retail. The business was built for ecommerce and then, using the systems and data they’ve developed, they could look at brick and mortar making sure to have the right number of stores in the right places configured in the right way. To put it another way, their brick and mortar business, whatever it turns out to be, supports their ecommerce. With existing brick and mortar retailers, it’s the other way around.
As regular readers know, I’ve called the “omnichannel” the word that legacy brick and mortar retailers use to put a positive spin on the fact that, unlike Amazon, they have the wrong number of stores in some of the wrong places configured the wrong way.
People don’t like people who make them uncomfortable. And when I do it, like now, I’m pretty sure it makes it less likely I get calls for consulting. But I’m all about trying to help you to run your businesses better and think you need the bad news as well as the good. Probably you need the bad news more. But, in a sense, this news about retailers closing isn’t completely bad news. I say that because, first, it’s old news (though the acceleration of the trend this year seems significant) and, second, because it needs to happen.
It’s all the Lydians’ fault. The Lydians were a people who lived in what’s now Eastern Turkey in the second millennium BC. Herodotus, writing around 450 BC, tells us this about them:
“…the Lydians lived their lives in a way not dissimilar to the Greeks. So far as we know they were the first people ever to strike gold and silver coins, and to use them: the result was the invention of shopping.”
It was, I think, a couple of years ago when I said, 3D printing of various products is on its way. I suggested maybe getting a 3D printer for a few thousand bucks and experimenting with it. Maybe print some key chains or stuff like that. The responses were along the lines of “Oh, sure, someday.”
Error: Contact form not found.
