The Future of Retail Requires Transformation

Retail Executive Magazine – “4 key trends are shaping future strategies and tactics to help retailers survive, adapt, and win,” said Brian Brunk, Principal at BRP. The traditional retail model has experienced significant disruption over the last decade. This cycle of disruption is being driven by ever-increasing customer expectations, competitive pressures from new entrants, and the proliferation of new technology like the smartphone. Customers’ journeys are varied and much more complicated than in the past.

Consumers now start and stop their shopping journey in various channels, including social media, and frequently shop for a product across different retailers, online and in the store. The path to purchase also varies by consumer and by the type of product they are purchasing. Consumers expect their experiences to be seamless and to have their “shopping cart” follow them throughout their journey. They perceive one experience across the entire brand, not broken into individual channels or locations.

As retailers adapt, customer engagement models must transform. Traditional retail lines are rapidly evolving. There is a blurring between the physical and digital environments but also an evolution of retail formats to include virtual showrooms, retail “theatre,” pop-ups, stores within stores, and more. As retailers find it more difficult to compete with commodity products, we expect to see more private-label brands as a key differentiator. In some cases, wholesale will become the new retail.

“The real disruptor on the horizon is self-driving vehicles, which will disrupt traditional supply chain models, consumer expectations, and the retail world.”

IT’S JUST RETAIL

Is this disruption new to retail? No — retail has gone through many periods of disruption over the years. The introduction of catalogs, the move to suburban malls, the rise of Walmart, and the advent of e-commerce are all examples of retail disruption cycles. However, the current rate of disruption and the subsequent transformation are probably the greatest many of us have seen or will ever see.

With the flurry of retail bankruptcies and store closure announcements, “Retail Apocalypse” has been the pervasive topic of the last 12 months. Mentions of “apocalypse” might work well when trying to grab headlines; however, the reality is something much subtler and far more interesting — the ever-evolving nature of retail and consumers. Retail is simply transforming. Overall, retail is growing, with many retailers opening new locations, increasing sales, and investing in the future. Retail is changing and, as always, there will be winners and losers.

Focusing on the “Retail Apocalypse” is liking hitting the pause button and ignoring what is really happening. Call it the “Great Retail Transformation”; it doesn’t matter. It’s the future, and it’s just retail.

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