Kagan: New rules for success in retail
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Retail is changing. That means in order to win going forward you must learn the new rules. Things change. Today, we see major retail stores going bankrupt, shopping malls closing and all sorts of chaos in the sector. Some say retail is dying and giving way to the Amazon.com type competitors. I disagree. If that’s the case, then why is Amazon.com going into retail with bookstores and grocery stores? Let's pull the camera back and take a look at what's really happening in the retail sector.
Retail will always be with us. There will always be a place for retail in our lives. However, the meaning of retail is continually evolving. Retail going forward is much different than retail we all grew up with. I remember a few years ago when the Apple iPhone stores first opened. They were a different model. They were delightful. Then AT&T Mobility started updating their stores. Another, entirely delightful, yet different and updated model. Now we see Microsoft, Amazon.com and others continuing to enter retail with new their ideas.
So yes, retail is changing. Some shopping malls are still busy and vibrant. In some parts of the country, shopping malls make more sense. Think about the Mall of America in Minnesota. Will the largest shopping mall in the America close? I don't think so. Why? Because it's in Minnesota where it feels like it's winter most of the year. Shoppers need a warm and dry place to shop.
I think shopping malls in the cold or wet country will continue to thrive. In the warmer climate things may be different. There will still be shopping malls, but increasingly the shopping mall of the future is in an outdoor space. It also has apartments, condos or villas, restaurants, offices and more. It’s curious, because when the weather is bad, these new malls are quiet, but like it or not, this is the direction things are heading.
Apps, IoT, cloud, AI, VR, AR are changing retail
Besides the actual shopping area, retail is also increasingly including technology to make the shopping experience more fun for the shopper and more profitable for the retailer. Companies use apps and technology to capture the attention of the customer and to get them to notice the store, to spend money and to build relationships.
Yes, to one extent or another, every retailer is increasingly dabbling with technology to get closer to the customer and to ultimately increase sales. Example, apps are of growing importance. In fact, increasingly, retailers no longer have cash registers. Instead, they have iPad tablets to ring customers up at the table where they are sitting with the advisor, while enjoying a hot cup of coffee.
With all this innovation, believe it or not, today only a small percentage of stores are actually doing a good job with new technology. Typically, they start out with their own app and think they can do it all themselves. The problem is, most fail. The companies which are more successful typically work with experts from the outside.
Amazon Go is part of retail trend of the future
Amazon Go retail stores have the potential to transform the way we think about retail going forward. Walk into one of these stores and your smartphone with an app registers you. Then you simply grab what you want and walk out. The scanners can tell what you have and charge your credit card on your app. Brilliant new idea.
Kohl's is another example They had their own app which customers paid no attention to. Since they started working with OmnyPay, their app is much better and customers actually use it. Increasingly, this is the model going forward. I see every retailer taking this same path over the next few years. Starting to dabble on their own, then realize they don't know what they are doing.
That's when they turn to outside experts. These expert firms are often smaller companies with specific knowledge on how to be successful in this space. Expect the leadership in these firms to change over time as one discovers a better way leaving yesterday’s leaders behind in the dust.
With all that said, retail is not dying, but it is changing. Then again, retail has always been changing. It's just that with today's wireless technology like apps and more, the next several years will completely redefine the shopping experience.
The only question I have for you is this. Will you be a leader or a follower? Either is fine because you stay with the change wave. Leaders gets to write the new rules, but they also take the arrows. Followers have an easier time, but must play by the rules the leaders created. Then there is the third category. If you are not a leader or a follower then you will simply lose. Period. The choice is yours.
So, who are you and what category will you fit into, leader, follower or get out of the way. Retail will always be with us, but it will be different going forward. Now is the time to be experimenting and expanding your brand in the mind of your customers and investors. Either stay with the growth wave and the change wave or it will go ahead without you, leaving you behind. The choice is yours.
Topics: Consumer Behavior, Customer Experience, Customer Service, eCommerce, Marketing, Merchandising, Omnichannel / Multichannel, Online Retailing, Shopper Marketing, Technology, Top 100 Retail, Trends / Statistics
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.