A wise CPR instructor once told his class, “If you’re doing CPR, the person is already dead. You can’t hurt them and you can’t bring them back to life. You can only keep their blood circulating and diminish the damage death causes while waiting for emergency medical staff to arrive.” As dark as it may sound, he is right, and in accepting this humble truth, at least one of his students later found the courage to step up during a dire situation when nobody else would.
Friends and colleagues, retail as we know it is dead. No matter how hard we pound on its mighty chest, nor how many times we force our own air into its lungs, it is not coming back to life. Look around you and see the fallen. The latest—Toys ‘r Us. It was preceded in death by 18 other major retailers this year alone, and 22 more are predicted to follow suit.
That’s not to say that these companies cannot come back from death, as many organisations do. Consider retailers like Apple, which nearly died in 1997, and General Motors, which sunk in 2008. These Goliaths fell, but they were never brought back in their original forms. No, the companies as we knew them died then and there. They only came back because they were recreated with new life, much like emergency medical crews arriving on the scene and administering treatment. The businesses were willing to part with their old ways of doing things, and because of this, we now have iPhone X and Opels remained in production. So, what does this mean to retail as a whole?
1) Online Sales Will Dominate
This past year, online sales in the UK hit £133 billion, a 16% climb over the prior year, according to Business Insider. The outlet also adds that mobile is expected to account for 45% of sales by 2020. In other words, in just a couple of years, companies that don’t have an online footprint will be missing out on roughly half their sales. The number is expected to grow exponentially.
2) Technology Will Change Shopping Behaviours
Amazon has more or less spearheaded the push to online sales, and the company is not done yet. Last year, we reported on why the company launched pop up shops. It wasn’t to get immediate sales, but rather, to get their hands-free/ voice technology into the hands of consumers. With Alexa at the ready, people could now call out to Alexa with Amazon Prime, and have virtually anything ordered, shipped free, and arrive in two days. Amazon isn’t the only one doing this, but they are the most prominent right now.
The precursor to voice was Amazon’s Dash system. The buttons communicate wirelessly and can be placed anywhere in the home and linked to countless products. When pressed, the Dash automatically orders whatever the item is. Think of it. Nearly out of washing liquid? Press the button and more will arrive in two days. Need nappies for the wee one and don’t want to go to the store? Press a button and you don’t need to travel. This ease has transformed how people shop. They don’t need to plan ahead, create big lists, and tote the whole family along.
Tech companies like Apple and Verizon have done away with long lines in their stores. If you need to talk to an associate, just check in online and show up. If you didn’t realise this was how the system works now, that’s ok too. They’ll check you in when you arrive at the store, and you can browse while you wait for your turn.
Tesco may have been ahead of its time when it attempted to launch Fresh and Easy stores across the western United States. The stores crept up in 2007 and died an ugly death by 2015. So, what gave? Tesco is a huge brand with a wealth of experience, but one of the biggest problems it faced was that US customers don’t shop like Brits. Americans load down their carts with a weeks’ worth of groceries or more, whilst those in the UK are glad to pop in a few times a week to get the freshest items for that night’s dinner. Pairing cartfulls of groceries with self-checkouts that nobody knew how to operate was pure chaos. However, in the years that followed, other grocers began adding self-checkouts as an option, and the model was successful.
Virtual Fitting Rooms
“We found that people only go into a dressing room once and get undressed once… it’s very hard to get them to go back into the dressing room a second time,” says Michelle Tinsley, director of mobility and secure payments in the retail solutions division at Intel. Moreover, “When you take that effort, you go into the store, you actually want to complete [the transaction], so you’re going to be irritated or mad if you drove all the way to the store only to be forced back online.” Neiman Marcus solved this issue by creating virtual fitting rooms. In reality, these digital mirrors capture 360-degree views of the shopper, giving him or her a clear idea of what an outfit looks like from all angles, but it doesn’t stop there. The tech enables shoppers to see the outfit in different colours on their own image, compare outfits, and send photos and videos to themselves or friends. Another retailer greets shoppers with a glass of wine if they like, and lets them peruse the racks on a large LCD screen. When the person knows what he or she wants, a staff member gathers the items and places them in the dressing room. Wrong size or wrong colour? Not a problem. A second virtual display in the dressing room lets the patron request a new item be brought in.
3) Retail Jobs Will Dry Up
Retail positions, from cashiers to salespeople on the floor, provide millions of jobs. However, as an unfortunate side effect of the shift in retail, many of these existing positions will be eliminated. The sad truth is that we could see something like what happened to Detroit, Michigan, in the United States when the automotive industry fluctuated. The once bustling city, now nothing more than a desolate ghost town in some areas, could have fared better, some say, with more planning. Perhaps as we learn to embrace new retail, we’ll see a gentler shift, as these individuals move into customer service, warehouse, packing, technology-related, and administrative positions.
4) How Retailers Earn Money Will Change
The basic model in retail involves a shop sourcing items from a wholesaler or vendor. This is part of what’s hurting Toys ‘r Us now, as its vendors won’t ship to them without cash-on-delivery or prepayment now that the organisation has filed for bankruptcy. The other challenge here is that, with people moving online, more wholesalers and vendors are selling their own goods, effectively cutting retailers out of the loop. Because of this, retailers have begun creating their own lines or using loyalty programs and such to gather consumer data. The data is then either sold to non-competing companies or vendors, resulting in an additional cash stream.
5) Physical Stores Will Become Powerhouses
Despite the model for retail changing, brick-and-mortar establishments will continue to play an integral role in retail, but how the space is used will change. Younger audiences, especially millennials, flock to shops when experiential marketing is in use. They’re after a memorable experience, be it a show, an engagement, an activity, a party, or a workshop. These events will drive brand recognition and create loyal customers for those who manage to pull it off well.
6) Pop Up Shops Will Thrive
Whether used as part of an experiential marketing campaign, orchestrated to create excitement and scarcity, crafted for brand recognition, or planned out to maximise an important period of time, like the holidays, pop up shops will continue to offer retailers the best of both worlds. As a simple way to combine an online/ offline presence without the overhead and long-term commitment, forward-thinking retailers will continue to grow, even as those who stand beside them fall.
Create New Life with an Improved Retail Strategy
If you’re one of the many brands embracing these changes, and haven’t yet selected a location for your pop up shop, or if you have a space you’d like to list for pop up opportunities, Popertee can help. Find a space on our site now, or list your space free, to prepare for resuscitation.