CES 2018 reveals how retail is changing
Walking around CES 2018, the annual technology conference held this month in Las Vegas, there were so many companies showing off so much technology it made your head spin. However, there were several key ideas that rose to the top at this year's show. One was how important the retail slice of the pie really is. This is something that should grab your attention.
Sure, retail is in the middle of a major transformation, even re-invention over the last decade or two. However, if we pull the camera back we can see how retail has always been transforming itself decade after decade.
Leaders of the online world like Amazon.com are putting enormous pressure on the more traditional retail landscape. However, it's also very important to recognize that retail is not dying. It is changing.
Retail continues to change and grow
There are two important points I want to make with you here.
One is how even the transformative companies like Amazon, Apple, Microsoft and more are also going deeper into the traditional retail environment. Consider the Amazon acquisition of Whole Foods as one example, and retail stores of Apple and Microsoft as two more. They are rushing toward retail, not running away from it.
Two is the fact that traditional retail has been going through this same kind of transformation and reinvention forever. We don't think of it this way, but many of our favorite store chains have simply disappeared over time.
A short list that have said bye-bye include Borders Book Store, Walden Books, B Dalton Bookseller, Circuit City, CompUSA, HH Gregg, Sports Authority, Herman's World of Sporting Goods, The Limited, A&P, Grand Union, Blockbuster, Hollywood Video, FAO Schwarz and so many others.
Many of these companies simply went out of business. Others were acquired by larger competitors. Eventually many of these larger competitors eventually failed as well. Industries change. What was hot yesterday, is often stone cold today.
Companies either ride the change wave, or it passes them by leaving them floating in the sea with no activity and growth. Think of how Blockbuster grew from video tapes to DVDs, but eventually failed as technology moved to getting movies online. So, sometimes companies can adapt and continue to grow. Other times they can't and eventually fade away like the sunset.
Regardless, retail as an industry continues to grow. The path has changed and continues to morph, but retail is not going away. That doesn't make it any easier for yesterday's successful companies to transform. However, every retailer should know that their future depends on whether their can reinvent themselves. Reinvention is the key.
New companies with new ideas have a much easier time since they don't have to change the meaning of the brand in the mind of the customer. However, they do have to create and build a brand relationship which has its own challenges.
Retail growth curve rises, crests and falls
It's all about the growth curve. Companies are either on the growing side, or they have crested or they are on the falling side of the growth curve. Which side of curve is your company on? Are you growing, cresting or falling?
As we have seen countless times, it is very difficult for a company who has been on the falling side of the growth curve to turn things around. Typically, the successful companies transform themselves before they lose traction.
However, with that said, retail as an industry has always been and will continue to be a growing and vibrant slice of our economic pie. We may not need as many shopping malls. We may see new kinds of shopping centers in an attractive outdoor setting. However, there will always be a need for great retailers.
Are you a transformative retailer?
Are you a great retailer? A transformative retailer? That's the litmus test. Great retailers stay on the growth curve. Others don't and fade away. That's the challenge faced by every retailer today, new or old. There will be real winners going forward. There will also be lots of losers as well.
Consider how the grocery business and industry will change with Amazon now owning Whole Foods. They will make things much easier and much more different. They will use technology to improve the experience and WOW the customer.
Traditional grocers, who once led with self-checkout counters, are falling behind now. Newer and smaller grocers like Trader Joes and Sprouts let customers check-out with their smartphone. Customers never have to touch the keypad.
So, on one hand challenges come from Amazon Whole Foods, but they also come from newer and smaller competitors like Trader Joe's and Sprouts using new technology and offering new ways of doing business. This means traditional grocery stores are under pressure to adapt or die.
Retail must transform or die
This is the challenge of today's retail industry. Retail always reinvents itself. New leaders who stay on the growth curve change everything. Old leaders must adapt. It would be better if the old leaders could lead the transformation, but that seldom happens. Usually they are pressured into changing by the threat of lost market share.
So, the bottom line is this. Retail is not dying, but it is changing. There will be leaders and followers. Which category is your company? That's the question that you should be asking. My advice, either lead, follow or get out of the way.
Leaders pave the new road, but take the early arrows. Followers don't steer the ship, but they don't take the early arrows either. Both of these lead to growth. If you are not one of these, then simply get out of the way, because like always, things are changing. As always, the choice is yours.
Jeff KAGAN Jeff Kagan is a Wireless Analyst, Telecom Analyst, speaker, author and consultant. Over 30 years he has followed the Customer Experience through technology like wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, AI, Mobile Pay, FinTech and more. Email him at jeff@jeffKAGAN.com. www