Retail shops have remained largely unchanged over millennia. Roman wares were displayed on shelves and the clerk would fetch anything you needed. It’s only been the last hundred years that we have had fetch-it-yourself stores.
And in the last fifty years we have seen even more changes. The humble barcode may well be the biggest of these changes. Not only did it open the way for scanners but it also allowed for inventory control at an unprecedented level. Less stock (the exact amount needed) of any given item, but more varieties of that item are now the norm.
Do you ever need something and find yourself looking vacantly at the sheer number of options? Not sure if we want red or blue, we just stare, unable to make a simple decision. I think maybe we have too many options in the supermarket.
Now the internet promises to change it all again. Amazon has decided that your refrigerator should place orders. They deliver the order while you’re at work and will even put it in the fridge for you (with your approval). Those of you who read these blogs regularly know that I’m the geeky one of the bunch, but this is a bit much, even for me.
Here is another application of internet love that I don’t care for. People now go to retail stores, shop, and try on a dress, find the color, style, and size that’s perfect, then photograph the barcode with their smartphone and leave. Once home, they place the order on the Internet because that is cheaper than some store with a showroom and salespeople getting paid to restock dresses. I understand this is far more common than one would guess. There is an American electronics chain called Best Buy that will throw you out of the store if you photograph price stickers.
It’s not that I hate all change. Go to Walmart.com, buy your groceries online and the order will be waiting at curbside for pick-up. I do like that. Or how about this: Go to the supermarket, fill up your trolley (Mericans call em’ buggies) and walk through an arch on your way to the car. The RF tags on each item are read and your card debited. No check-out. Of course that also means no cashier but that was a blog from a couple weeks ago. You can read it here .
I suppose nobody cares if the customer doesn’t want these changes. They are coming to a small slice of the world and you will not stop it. By the way, I define a small slice as a few countries in Western Europe, Canada, the US, and Japan. Here is a picture I took on Market Day and an old woodcut from Asia. Different parts of the world a century apart. It’s a safe bet that some parts of the world will still have market days many decades from now.
So that brings me full circle, back to our question: The future of retail. I say bleak if you live in that small slice of the world and the exact same your GrandPa knew if you don’t.
Future of retail
So the iconic ‘Toys-R-Us’ is no more. They filed for bankruptcy and it is obvious now that they’re going to shut down all the operations soon and go out of business for ever. The USA Today has pointed out five reasons for them to go out of business which was a combination of bad decisions (mostly) and sometimes bad luck.
Being a Russian I can’t say that I have sweet childhood memories asking my parents to buy me some fancy toys and all that stuff. We didn’t have it then because I was born and bred in the Soviet Union. And we won’t have it now. I barely knew it as there were no ‘Toys-R-Us’ stores in Russia. It was, and, I think, still present only online. I’ve seen some stores while visiting US but that was it. It was never on my radar and I am obviously not in a state of shock.
I am sure, though, that Roger and Dean would share much more exciting stories about the ‘Toy-R-Us’ saga.
As to the future of retail, I am not a marketing person to really make any valid observations. There was a couple of truly iconic brands that do not exist anymore and I kind of miss them. One is Pan American and the other is Saab. I believe it was a cool lifestyle to fly Pan Am overseas and to drive a Saab. Recently ABC produced the ‘Pan Am’ TV series but it lasted only one season… I’d prefer some not-so-breathtaking brands/retailers to vanish like, say, Opel or Ariel.
Anyway, brands/retailers come and go. But Walmart or Macy’s are still here. It is going more and more online, yes, but you wouldn’t refuse yourself a pleasure to visit some fancy boutique or department store and have good time there even doing only window-shopping. This is why I believe that the retail business is going to be OK anyway, no matter whether it is online or offline.
Roger Loves Shopping…
In the UK, Toys R Us and Maplin have crashed, New Look is looking to shut some 60 stores, and the futures of Mothercare and Moss Bros look very uncertain. Debenhams and House of Fraser are struggling.
While all this is going on, online retail sales in the U.K. surged by over 13% in February 2018, compared to a year ago.
I’ll be honest with you – I so loath shopping, especially in malls. I just cannot see the attraction in wading through store after store, often not finding what I am really looking for, but when I do, carting around more and more bags of goodies, struggling to get them to the car, then driving home exhausted and miserable. What a waste of precious hours that could be put to better use.
But wait, what is this? Mrs B thinks exactly the opposite – she says shopping is to be embraced –it’s an experience, she says, and needs to be appreciated and enjoyed……….
Back to the situation in the UK – The clothing giant Next, whose profits have plummeted by a quarter last year, look like they are trying to become the next John Lewis by renting out space in their shops to travel agents, florists, spas and even car showrooms. Indeed, Natalie Berg, a retail analyst at NBK retail, has said that stores of the future won’t just be a place to buy stuff, but also to eat, discover, play and even work.
I can’t see how these new look department stores are the way forward – it might be cheap to set up and makes the most of existing space. But I think companies that go down this route will have to create more and more stores, and although sales will increase, profit margins most certainly won’t.
However, according to Dr Jeff Bray, principal academic in marketing and consumer behaviour at Bournemouth University, UK stores such as John Lewis and Harrods will be successful over the next ten years because they have a clear strategy, identity and the consumer knows what they stand for. So presumably, others will have to follow suit.
How about this: Future department store should offer customers the ability to feel and touch in that store, but also offer browsing products online before they visit, allowing them to view a product in any size or colour. That’s according to Craig Phillipson, managing director of retail design consultancy Shopworks. “If everyone can find out about everything on the internet and order it to their home, department stores need to deliver something more interesting, whether that’s customer service, instant gratification or personalisation,” he says.
So retailers will have to evolve and be innovative to keep encouraging people like me to bother.
Over in China, where online retailing has grown hugely, old-fashioned retail is enjoying an unlikely resurgence. Xiaomi, the Chinese tech giant, previously only online, has opened more than 200 stores across China and another 130 abroad. So somebody likes old fashioned shopping…..
There is an argument that e-commerce will become just a traditional business, and indeed may be replaced by the concept of “new retail”. That means integrating online, offline, logistics and data in delivering the product or service.
Not enough for me. This is how it will go. Ready?
I search online for everything I need. If it’s clothes, I use my app that gives my measurements from head to foot – I order the items, and expect either a white van, or in the near future, a drone, to deliver said items to my home, usually on the same day. My fridge and my food cupboard will automatically let my suppliers know when any items need replacing, and they arrive within a few minutes of being ordered.
I think, I mean, I really really hope, that in a few years, going to the local store, or the mall, will seem so very 2018…………… and my life will be so much the better for it.