Will You Survive the Retail Death 2.0?
Are we witnessing the death of the big-box store? Following Best Buy’s headlong decline, Christopher Matthews of Time asks this very observant question. He notes: “It’s possible that the forces of e-commerce and advancing technology are too great to effectively combat and that specialized superstores are no longer efficient.” Are we really entering “the death of retail 2.0?”
As this nation has developed, history shows that every 50 years or so we experience major retail overhauls, forcing retailers to question how they engage with shoppers.
Circa 1900 saw the advancement of rail technology drive a largely agrarian society off the farm and into the cities, resulting in the establishment of the first department stores, which at that time were viewed as a very diverse and unique way to shop.
Circa 1950, the passing of the U.S. Highway Act and the maturity of the automobile industry gave rise to the suburbanization of shoppers, yielding the modern day shopping mall and specialty retailers.
Welcome to today where our digitally connected world – characterized by the rise of mobile technology and connected consumers – are once more transforming the shopping experience.
What I find particularly interesting is how since the turn of the new century, the 50-year cycle itself seems to be shrinking. We all remember 1999 and the Y2K concerns – there were no smartphones or MP3 players – GPS technology for civilians was just entering the market along with the tablet PC.
What’s more is the convergence of these capabilities onto a single device where you can shop, showroom, socialize, share and buy has changed the face of retail. And for the first time, while it is not being driven by modes of transportation, it is moving at breakneck speed. What will the retail experience be like in three, five, or seven years, let alone 50? I am not convinced we know, but one thing we can be sure of is that it will be vastly different than what it is today.
For retailers to be successful today and tomorrow, they must focus their efforts on harnessing these technologies, innovation, speed, flexibility and agility. The biggest mistake big-box retailers made was choosing to be a big box specialty retailer, but hindsight is 20/20 as we all know and who could have predicted in 1990 where we would be today?
The key here is that retailers must embrace agility – always expecting the unexpected and anticipating change to occur much faster and more dramatically than they can imagine. By doing so, they can take a more proactive and strategic approach to their business versus playing catch-up from a defensive and potentially more costly approach. If done right, not all big-box retail will go the way of the dodo, as Matthews points out.
Tell us your thoughts.