The Changing Face and Future of Retail
It is fair to say that retail and its successes and failures have a wide effect on a number of other sectors, businesses and people.
I think it is also fair to say that if you are not moving forward in your approach and processes within this sector, you are moving backwards. As many retail giants around the globe fall and others take to very non-conventional thinking to combat the downturn. I ask:
‘What does the future hold for retailers and what sort of model are we looking at going forward?’
The one sure thing is that the internet will continue to acquire market share from the high street and leave the sector changed and consumer habits altered.
The key areas to look at when determining how far this change will go are:
- Consumer preference
Not too much insight required here: Online 1 – 0 Physical Retail
As things stand, bricks and mortar still have around two thirds of the revenue with online taking the other third. The preference for online being strong across the FMCG space with relatively low cost, low impact items. Luxury, expensive items still hold preference with physical shopping and the experience gained around the purchasing process – I think it will be a while before wedding dresses are purchased online! Online 2 – 1 Physical Retail
As with cost for online, urgency is a no brainer - bricks and mortar wins. Although various large online retailers – namely Amazon – are looking to bridge the gap by deploying strategically positioned facilities around key populations to deliver same day delivery on a number of items. An improvement but not a like for like solution. Online 2 – 2 Physical Retail
This is a hard one to define because what constitutes good service to one person may not mean good service to another. In essence this is a grey area and one that in my humble opinion comes down to differentiating ‘Service’ and ‘Process’. High end luxury products that are life, home or bank balance altering require ‘Service’ whereas online FMCG goods require a swift and simple ‘Process’. Online 2 – 2 Physical Retail
Final Score 2 - 2
As it stands, physical retail has a potential of change ahead of it and in the foreseen future, I do not see online wiping out physical retail - they simply cannot address the urgency to the same level or provide the experience to the customer in the same way. Furthermore what would become of all the coffee shops full of disenchanted husbands, kindle and coffee in hand and longing for the car park?
The future of retail from where I stand right now looks like a high street of specialist, luxury and high end operators that provide what cannot be provided virtually, and an online market of all that is fast moving, low cost (relatively) and generally not life changing products.
Agree or disagree?
These are the views of a consumer and a recruitment consultant that has a focus on the FMCG and retail sector and as everyone reading this is a consumer and some of you (hopefully) operate within the retail sector, I would be interested to hear your comments and thoughts.