Retail is transforming from a place where people “get” things to the facilitation of “getting” things.
Consumer shopping is changing in the digital age faster than many may have anticipated, and this is putting downward pressure on store-based environments. In fact, the very definition and understanding of retail as a whole is undergoing change. How radical that change will be is anyone’s guess. However, we believe it’s going to increase geometrically and destroy the current retail model completely over the next decade.
Ecommerce is having a massive impact already on most retailers, and many will not survive. If they do, they will be somewhat unrecognizable from their current forms. Many retailers find false comfort in the fact that current ecommerce penetration is only 15% or so in the US. It’s perhaps double that in China and India where many new consumers skipped large store-based retail when entering the marketplace. The rate of transition for most consumers is getting ready to experience hockey stick growth upward as a host of technologies converge to make “place-based retailing” simply less convenient than ecommerce at price parity or even price-advantaged.
Like any brand, “retail relevance” exists in the mind of the shopper and, unfortunately for many brands, relevancy will vanish as their ability to connect with shoppers is diminished. Retailers must redefine themselves in consumers’ minds as a “complete shopping facilitation service” no matter where the consumer chooses to interact.