Opening Insights: The Retail Apocalypse
What is happening to retail? Simply put, it's in trouble.
We are living in a consumer-centered world, where companies like Amazon control the market.
Enter the new age of the customer. Customers are demanding more today than ever before. This expectation first affected retail and other consumer services. It’s easy for everyone to point to Amazon as the gold standard in responding to such demand. Amazon certainly excels in customer service and in providing the many products it carries, and the online behemoth is even attempting to enter the financial services sector, offering consumers loans, insurance and checking accounts. But these efforts are aimed mainly at increasing participation in the Amazon ecosystem, not replacing the agency system, according to CB Insights. Amazon will never be the gold standard when it comes to being a local provider who offers customized personal service and every possible insurance and financial services product that households and businesses need.
Korsgaden, T. (January 7, 2019) The Customer Is in Control.
https://www.insurancejournal.com/magazines/mag-ideaexchange/2019/01/07/513807.htm
The truth is that Amazon is very much in control of their sellers. All complaints and problems reported to Amazon and not the seller are reviewed at the discretion of Amazon. They have the final say on returns and refunds, regardless of the sellers policies - in Amazon's eyes the customer is king and their loyalty to Amazon is of most concern.
As retail collides with adjacent consumer-focused sectors, the industry continues to undergo constant disruption. However, amid the disruption, one thing remains consistent: Consumers are becoming more powerful, with expectations of having it all.
2018 left the industry with a lot to digest—a strong US economy, a record-breaking holiday season, mixed retail earnings, some high-profile bankruptcies, along with global trade and economic tensions.
Bolstered by a strong labor market, growth in disposable personal income, and elevated consumer confidence, 2018 experienced strong retail sales. But the economy may face some headwinds in 2019—making the year one of transition for retailers, who may need bold moves if they want to set themselves up for success in the future.
Deloitte. (2019). 2019 Retail Industry Outlook
Navigating disruption in retail. Retrieved on January, 14 2019 at
https://www2.deloitte.com/us/en/pages/consumer-business/articles/retail-distribution-industry-outlook.html
Informational Insights: Retail Realities
Online now accounts for almost 20% of retail sales, growing at ten times the rate of store sales in the first half of 2018. Discounters are taking their share in grocery and non-food, however they are not immune to the troubles on the high street with the pound shop sector looking increasingly overstretched.
We’ve also seen more signs of structural change in UK retail as store closures, administrations and CVAs increased this year - the first half of 2018 saw 4,400 net closures across the UK high street, up from 103 in 2017. This represents an acceleration in the rate of store closures with almost as many in the first half of 2018 as in the whole of 2017
Deloitte. (2018). Retail Trends 2018. Retrieved on January, 14 2019 at
https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends.htm
As retail continues to go online we have to ask, why and what can be done?
Why is online so popular?
...e-commerce has made it so easy to click, pick, and ship that there’s no need to go to a physical store. It takes too much time. And if the purchase isn’t right then just return it, generally with no shipping fees. Traditional shopping takes too much time going from store to store. These folks have far better things to do as a generation.
I get it.
For me, back in the day and even still today, shopping is a hobby. It’s a way to spend an afternoon with some friends. It’s a release. This younger generation though has other things to do, so they get shopping out of the way and then they go on to live their lives.
So what’s a retailer to do?
Create an experience!
Build a full experience in store that makes millennial shoppers want to spend time there. Create elements around the product line that make it interesting beyond just the product itself. And make it all much more engaging and entertaining if you expect anyone to be motivated to physically come into the space.
You also need to make it feel much more customized and catered to them. It’s not about just selling products or services anymore, it’s about fulfilling customers’ needs in the shopping moment with something to take home with them...an experience to take home with them. We have to give them a reason to get out of their chairs and into a retail environment. Without that experience, shoppers will continue to shop at their convenience...likely on a desktop or mobile device.
That’s what needs to be happening to retail!
Joseph, J. (March 21, 2017). What's Happening To Retail?!? Retrieved from Life on January, 14 2019 at https://www.huffpost.com/entry/whats-happening-to-retail_b_58ce8ec8e4b07112b6472ecb
Possibilities for Consideration: How to Create the Experience?
In order for retail to survive they need to create a reason and an experience for why consumers and customers should visit and maintain loyalty to the brand and store. Amazon will continue to put the customer first, above employees and retailers. Retail is being threatened and needs to consider HOW THEY ARE GOING TO KEEP THEIR CONSUMERS AND ENGAGE AND COMMUNICATE WITH THEM DIRECTLY?
- What if retail could have been saved?
- What if customer service jobs and experience could be captured, transferred and learned?
- What if automation could fuel and promote the heritage, legacy and culture of the organization... ensuring sustainability of the culture and creating the optimum experience?
- What if the wisdom of yesterday could be integrated and transferred to today's generation?
- What if you could be a part of a solution to unite and support people in developing collective and individual sentience?
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