Retail is hurting. Retail is a dying breed. Retail is being eaten by e-commerce. That’s what we’ve been reading in the media. And many examples to be given as proof, just look at the bankruptcy stories from rather large and established retail groups.
So, what gives? Will E-commerce destroy retail? Is retail dead?
Well, ... No. Lack of true value for customers will, be it offline or online. So let's not focus too much on e-commerce but on the many opportunities to give value to customers and to stay relevant to them, regardless of the channel, shall we?
It doesn't mean that brick and mortar stores will go away. It just means that under the influence of digital, tech and other societal changes, consumers have changed too. They expect different products, different service. They value different things than they used to.
Rudy Lefèvre, longstanding retail expert and ex-ceo of a large Belgian retail group, also one of our trusted advisors explains: “It's increasingly obvious that it's not individual retailers that are filing for bancruptcy, but the underlying business model. And 'better execution of a failing business model' will not help anyone. You can only gain from the value you create. "Distribution of goods in the most traditional sense" creates value only in sporadic cases. Become either best-of-class in logistics or in service-orientation.
Take focus, become the best and you’ll find it a much better driver of value.
Focus on logistics is not just for everyone. Think of Amazon and Action. But service and customer-orientation opens up such a wide range of opportunities for any retailer.
Start with the simple things like hospitality, kindness, personal service, personal advice, trust, being local, recognition, shared passion, .... But be ambitious and go further: think of services that really help solve your customers' problems, that help them be just that tiny bit happier. 'Intelligent selling' is just the tail of this new value chain, the head being service. “
Embrace this changing environment. And instead of fearing disruption, engage in your retail organisation's transformation.
Make no mistake about it, digital will win. But instead of seeing it as a threat, think of how you could leverage 'digital' in this service-oriented approach! Instead of creating a digital strategy, you'll just have to create your strategy in a digital world.
A digital world, if I may add, that will revolve around the demanding and emancipated customer.
Better to create strategy around that customer, finding out what it is she wants first. Understand your customer and start from there. It will force you not to think in channels, but in 'how can I create value and service for my customers to the best of my ability and be profitable in the process'. Inevitably digital and brick and mortar will blend.
In unsure times people look for cosiness, they look for warmth and human contact. Retail has a wonderful opportunity to offer this. If they should combine it with "augmented intelligence", they will win from e-commerce within 5 years, says a recent IBM report.
Emotional engagement, authentic service will become scarse, thus of extreme value. Traditional retailers have to factor this into their rethinking of their brick and mortar strategy (in this digital world). However, pure e-commerce players will need to face this challenge too! They are not exempt of having to truly understand and being able to engage with their customers.
Traditional retail as we know it will disappear. Just as likely as traditional e-commerce will disappear. Instead retailers and purely e-commerce players alike will need to start digging to find out how they can win the hearts of their customers and keep them coming back for more.