Retail experts agree that the landscape of the industry is fully in the midst of ever-intensifying change, but rather than fear a market ‘Apocalypse’, some are pointing to a less alarming but nonetheless challenging ‘retail reset’ and the urgent need for adaptation.
Writing for RetailWire, James Tenser mused that we might be”witnessing a transformation wrought by a convergence of technological, economic and behavioral trends”, whilst acknowledging the part played by Amazon in shaping the future of retail.
Others have a more apocalyptic outlook, however, with Nestle director, Tom Schwarztrauber, pointing out that “Wall Street has a list of retailers on a death watch”, anticipating that up to 80,000 US shops would close in the next five years, some 7 per cent of retail locations in the region. Around 13 percent of total retail sales in 2017were transacted online according to the U.S. Dept. of Commerce reported.
Whilst its tempting to blame Amazon, rents or rates for the woes of retail, the true picture is a bit more complicated. Speaking at the Global Retailing Conference, Mr. Schwarztrauber added: “Shoppers are in charge now, due to the presence of the inter-web. They are no longer geographically contained around local stores. The nation is over-stored. There has been a fragmentation of the mass market. Manufacturing scale has gone out the window. The internet has permanently blown up the purchase funnel.”
Advising retailers on how to successfully ‘reset’ their business, Mr. Schwarztrauber empahsised that the key point to bear in mind is what, where and how shoppers want to buy, not what you want to sell them. Retailers should, he says, stop building stores and start building “experiential stories”, creating personalised communities rather than mass-market commerce.
“This is retail Darwinism — a natural process of renewal”, according to Mark Ryski, Founder of HeadCount Corporation. “The key to success will be the ability to adapt.”
Retail Influencer, Phil Chang, agreed, saying: “We’re heading into an era where the consumer is at the center of commerce. That means that retail has to stop telling consumers what they want, and find a way to give them what they’re searching for.”
The Retail Doctor, Bob Phibbs, was more cautious, however, commenting: “It’s easy to say that the retail apocalypse is all garbage, however — and it’s a big however — these numbers don’t show the scores of independent retailers going out across the country. Entire shopping districts are going dark…and as brands go out it’s a wholesale slaughter on margins across all categories slaughtering those still in business. This is more than a market correction”.