Key online players are becoming retailers – what should YOU do?
How to respond to the new retail landscape
The look and feel of brick and mortar stores is definitely changing. In fact, the entire retail industry has transformed in the last ten months, with online players having become actual retailers. What does this mean for your business?
- Digital retail stores
- Triggering factor
- How to respond?
- Many modes of shopping
- Transforming 1000 stores
Digital retail stores have become reality
Last October, we attended one of the top events in the retail industry: Shoptalk Europe. Three days that confirmed that digital retail stores are no longer just a vision but have actually become reality. Technology is entering the brick and mortar store and it’s coming in fast. The process of stepping into a store, picking up products you need and paying for them at the counter, which hasn’t changed in decades, is now coming to an end. And even digital retail stores as we knew them, with consumers looking up products on an in-store tablet, are becoming outdated. The two separate worlds of online and physical shopping are truly coming together.
Triggering factor: online players becoming true retailers
So what has been the triggering factor? It’s the key online players, like Amazon and Alibaba, who have been buying and setting up stores, the former for wholefoods, the latter for Scandinavian-style furniture in China. And that’s the major difference between the NRF Event last January and Shoptalk in October - we have moved from vision to reality within barely ten months. At the NRF Event, we saw the same technologies, but there was no real urgency. Online players were still online players. Now they’re retailers, doing the exact same thing as traditional retailers, but at a higher pace. Changing the business directly and no longer indirectly. They’re in your backyard now.
How to respond?
So how should you respond? This is a tricky question. It’s not just a matter of looking up all the technology options that are out there (AI, AR/VR, platforms, blockchain, IoT) and changing the one store you own. This concerns all your stores, which might be hundreds or thousands around the globe, with their particular legacy landscape. You should start with a very basic question: what is the purpose of your stores, of the shopping experience? Followed by essential questions such as: how many stores will you need in the future? More – or less? How big should they be? And what particular type of technology will be necessary? Essential, since they require huge investments.
Many modes of shopping
However, there is good news as well. There will be many modes of shopping in the future and there is no up-front known right or wrong anymore. In this day and age, there are agile innovation approaches with an emphasis on good execution and learning. So even wrong initial decisions can usually be “repaired” by good execution and recovery decisions during the learning and testing process. There is one condition though. You have to start now. If the world of retail can change that dramatically in the less than ten months between the NRF Event and Shoptalk Europe, who knows at what speed new changes will take place. We’d better not wait and see.
Transforming a 1000 stores!
As we get many questions about the future of retail stores, from both within and outside of the retail industry, we’ve recently teamed up with Legend World Wide in Belgrade to open a connected store that leverages the full power of in-store technology. We’ve gathered the learnings from our store experiment and drawn insights from interviews with top industry names to try to understand the future of retail. Our aim was to kick-off a practical discussion for retailers who have been struggling with the question of how to transform their store fleets and make smart, data-driven decisions.
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Deloitte at Shoptalk Europe 2017
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