We now have more singles than married households. The retail industry stuck to the big box approach over the years despite a shrinking middle class, graying baby boomers, rising debt, multiple decision makers in the households, and the millennials with different spending habits. By Nancy Lin (Founder & Host, Business Reinvention)
"Retail has been hacked" is how retail insider and futurist Doug Stephens summed up the current state of the retail industry when he was on the Business Reinvention show last week for the discussion "The Retail Revolution And the Road to Remarkable".
But are online retailers really invincible? Do traditional retailers have a chance to thrive in the future? Many have blamed the down fall of the retailers on the emerging technologies, but Doug pointed to the changing social and economic trends as drivers for the fundamental shifts in the retail industry.
We now have more singles than married households. The retail industry stuck to the big box approach over the years despite a shrinking middle class, graying baby boomers, rising debt, multiple decision makers in the households, and the millennials with different spending habits.
In his new book, Retail Revival - Reimaging Business in the New Age of Consumerism, Doug offers refreshing insights and recommendations for the retailers. To survive the retail revolution, retailers must transform their business models from distribution of products to distribution of experiences. Some of the innovative stores are already doing so. New York's A Startup Store features merchandise from startups. The store changes products and physical designs every four to six weeks, taking the concept of Zara to the next level. Another example is Guest Chef, a restaurant in Oakland, California, that hosts a new chef every two weeks to create a sense of surprise for their patrons.
"The purpose of retail will no longer be to solely convert every customer into a buyer of goods but rather transform them into disciples of the brand itself. To begin a relationship – a dialogue that may play out in any number of buying channels; online, in-store, mobile or elsewhere", said Doug Stephens.
Physical stores are less about transactions but will increasingly about building a pre-sales and post-sale relationship with the customer - "Stores will become media, and media will become stores."
"Consumers aren’t merely buying what you do or how you do it. They’re also buying why you do it", Doug pointed out. Retailers have to ask themselves why they exist and what they stand for, because that's why customers buy from them. When you create a reason for consumers to want to go to your store, they will become your media. Traditionally, retailers have to launch a marketing campaign to drive traffic to their stores. In the future, the store will need to create a clear brand to attract customers who would then become their marketers when they are impressed with they see.
The purchase path is becoming unpredictable. Doug argued that retailers will have to deliver remarkable experience in order to stay competitive. Being average is no longer an option. Doug predicted that "at high-end merchants, stock clerks, cashiers and inventory counters will be replaced with technology. The front line salespeople, however, will be higher performing professionals who are paid considerably more money than today." To learn more about the implications for the CMOs, COO, and CPOs, download the podcast.
Photo credit: Squirrel83 on Flickr.
Women 2.0 readers: Are you seeing a retail revolution in our midst? Let us know in the comments!
About the guest blogger: Nancy Lin is Founder, Host and Producer for Business Reinvention. The show features business innovation and transformation stories. She brings to her show a strong understanding of business having worked for Yahoo, DHL, Johnson & Johnson and Pepsi in the US and international markets and driven strong growth with innovative business strategies. She is also an executive coach, a business consultant and the founder of Change Agent SF, which helps clients transform the way they look at their businesses and leadership.