It has never been easier to set up a shop, but never more difficult to run one.
Retail, like most industries, has been moving linearly and the business models & practices of the past are becoming increasingly irrelevant. Digitization in retail is however accelerating rapidly and much faster than we think.
Technology is playing an increasingly important role and is influencing more of our day-to-day decision making. Advanced technologies such as 3D printing, facial recognition, virtual and augmented reality, and robotics are emerging and giving retailers new ways to engage customers and to run their business more effectively, while their costs continues to decrease.
It’s not just a technological change however that is disrupting retail, but an overall change in consumer preferences and behaviours, as well as seller competencies and capabilities. While consumer demands might not have changed much – they still want quality products, fast and cheap – their expectations have never been higher. The consumer has become a product experience expert, is actively using price and product comparison sites and is developing ‘brand blindness’, i.e. becoming less loyal to specific brands and retailers for their shopping needs.
It’s fair to say that the retail landscape has become increasingly complex and that the lines between physical (analog) and digital continue to blur. More and more brick-and-mortar stores continue to move online, while non-traditional players such as Amazon start challenging established brick-and-mortar incumbents.
The ‘Death of Retail’ or ‘retail apocalypse’ that eCommerce and digital capabilities have caused has however largely been exaggerated.
Today only around 10% of overall retail sales is happening online. Even though this might be growing year-by-year, there’s plenty of room for disruption.
So, what does ‘New Retail’ look like?