We are living in retail’s Golden Age
We are living in retail’s Golden Age. Forget the resources downturn, predictions of a softening economy and wavering consumer sentiment. Most of all, forget the recent slew of high profile retail failures. They are evidence of the fact we have crossed the threshold of a new era – one in which the old retail value propositions, operating models, thinking and culture are becoming extinct.
Instead, hold this thought: the current decade (and maybe a few years beyond) will be regarded as Retail’s Golden Age.
Firstly, the nexus of power now sits absolutely with the consumer. In the broadest sense, we are witnessing the democratisation of commerce.
Digital technologies in consumers’ hands have made any and all information available 24/7. The same goes for access to products, services and resources. Instore experience and service are being replicated digitally and the “I have to see/touch/feel” argument holds less sway when consumers are digitally sharing their personal product experiences in detail. Where once retailers used to control access to product and information in a curated space, now consumers effectively self-curate using a range of digital resources. They are the bosses now.
New types of consumer-centric retail business are blooming. Some exist solely because of digital technologies, others at least make full use of them. All are innovating in new operating models, techniques methods and technologies. Digital, social and share commerce models, ubiquitous devices and the Internet Of Things, consumer-centric technology, media convergence, mass customisation and personalisation – these are the forces which have changed and will continue to change the retail landscape. Innovative businesses such as Naked Wines, Magazine Luiza and Shop Wings all exist because of this change.
Secondly, and as a result of democratisation, the century-old established retail model has exploded – detonated by a thousand disruptive changes, challengers and choices. The concept of distinct retail channels has become so blurred as to be almost useless and “omnichannel” retail can be used to define pretty much any retail business. The term used by Woolworths may get closest – they call it “multi-option retail”.
This isn’t just about old retail versus new retail however. New retailers get this (it’s why they exist after all), but so do the best of the established retailers, who are responding with humility and openness. They are really getting alongside their customers and finding ways to help them in their choice, purchase and consumption. They are evolving their customer engagement strategies, building new service capabilities and realigning internal operations to better fit a changing customer relationship. In this regard, we should celebrate the revitalisation of brands such as The Good Guys, Harvey Norman, Macy’s, John Lewis and Nordstrom just as much as we champion the arrival of Vinomofo, Neighbour Flavour and Birdsnest.
Finally, the change is rippling out to every aspect of the retail industry. No area of retail is unaffected and that especially includes all service providers to the retail and consumer business sectors.
It is six years since the inauguration of the Online Retail Industry Awards, and in that time one of the biggest changes we have seen in the award submissions has been the growth in the number and sophistication of technologies used by all retailers. This often involves the use of highly targeted niche technologies focusing on deep understanding of the consumer and personalisation of engagement.
The logistics marketplace too has seen the emergence of several new types of service providers, and many alliances between large and small physical logistics providers and systems vendors. All players are looking beyond their core skill set to use data and technology to facilitate a smoother, faster and cheaper last mile. Temando, Sendle, Flirtey, Seko Omnichannel and eStore Logistics have arisen as a response to the atomised, time-sensitive, highly visible supply chains retailers must now run in pursuit of and in support of the new consumer.
The world of retail is more engaging, richer, scarier, more fragmented, more open, more hopeful and more exciting right now that it probably has ever been.
For retailers, consumers and anyone passionate about the retail industry, truly, this is the Golden Age.
Andy Powell is a Director at Agile Commerce Consulting.