Is Retail Dead?
Retail businesses have bad press for decades, is retail dead, and if not, what is the retail of the future?
Is Retail Dead? State of Play.
Retail ventures have negative press for decades. The internet revolution first, and the digital era transformed the retail industry. Business school’s students often desert retail trade companies, and enterprises suffer from qualified resources. Is retail dying? What is the retail of the future? I am a retailer, what should I do to adapt my company?
In this article, we will challenge the overstated affirmation that retail is dead. We will discuss the current trends faced by this sector and how to adapt to them. Is retail dead? Don’t be so sure about it!
Retail Apocalypse: Adapt or die.
“Retail apocalypse is a controversial term used by the media to describe the ways a shift in consumer spending patterns may be impacting the traditional brick-and-mortar retail store, business model.” Corinne Bernstein (https://whatis.techtarget.com/definition/retail-apocalypse)
Retail is one of the primary sectors of the economy. According to satistica, retail in the U.S only equivalent to 5,7% of the Gross Domestic Product (GPD) when the arts, entertainment, recreation, accommodation, and food services represent 3,2%.
In the US only, retail is the largest private employer, supporting one job on four. If we extrapolate to the other countries globally, we can reasonably assume that retail is one of the strongest and largest fields of trade and job creator.
Most of the bad reputation the retail sector has comes from the low margins and profitability.
Additionally, what restaurants, cafes, and small companies are great at is often to close after a couple of years, making us identify the sector as a high-risk one.
However, retail is a sector with low entry costs attracting people with great ambition and incredible skills.
Is Retail Dead? The emergence of new types of retails stores
Customers spending patterns switch over time. Most brands struggle with the test of time, and retail businesses are no exception.
Companies open and closes all the time, and stating that retail is dying is completely overstated. We have been hearing this for decades, and yes, the retail as we knew it is dead, while other forms of retail shop emerge such as dropshipping, pop-up stores, concept stores or the digital native vertical brands (DNVB).
New types of retail stores welcome fascinated customers and passionate workers. Retail is often seen as generating dead-end or not paying enough jobs opportunities.
The truth is that the transformation the retail sector is facing is profound, and anyone who is not involved will not last long in this industry.
Many retail brands have training programs and are eager to see their employees grow and thrive. Most of the merging brand in that space combines classic retail background with a top-notch experience oriented toward the client.
Not everyone is suited for retail-affiliated positions. They require a bunch of skills not always simple to build. However, if you have tremendous customer service skills, elementary sales skills and are happy with some organizational and supervisor grit, retail is the place for you.
DNVB – Digital Native Vertical Brand
What is a DNVB? A digital native vertical brand is an area where technology meets retail. They represent a high potential ground for retailers. Champions of this model are startups like Warby Parker or Everlane.
The strong voice and reference to understand DNVB better is Andy Dunn. As he stipulates, the challenge is to convince both investors who specialized in technology and believe in retail values.
As a human, we need connection with other people. Digital products and services cannot fill that void, and this is where the DNVB businesses have found a lucrative niche. They offer a shop plus a virtual experiment.
We live into the experience era. Being online is at the core of the strategy. The physical store complements the online space instead of replacing it.
Millennials are looking to feel and live an adventure when they purchase a product or a service. There is a strong trend around frugality and eco-friendly products and services. The You Only Need One (YONO) strategy promote life-long products to stand against fast-fashion and planned obsolescence. They sell products with a life-long guarantee.
Companies face the urge to adapt their organization to open to creative people.
The shift in values of the creative class is enormous. For millennials, honesty and transparency are vital, and this generation wants to purchase from a brand that positively impacts the world.
The 21st century is the era of creativity and art. AI has liberated us from repetitive tasks, helping humans concentrate our efforts to innovate and create more often. The long-term benefit of individual liberation has only started, and the impact it already had on the retail industry is one aspect of it.
Retail is not dead, and this is what you need to do about it
Initiatives like dropshipping can help us to question and transform our vision of what a retailer is. Many small local shops leverage online tools such as a website, social media, and other platforms to minimize the risk connected with the stock.
Classic retail shops have to rethink the way they engage with their customers and involve them as much as their employees. It is the complete customer experience that is at stake, and few succeed without exterior support.
Social media are essential for a well-rounded retail strategy. Even if you do not transform your business at the core, social media platforms have become crucial for development.
Audiences on social platforms expect brands to engage with them on a more personal level. Personal stories and love motivate younger generations to buy from a natural person behind the brand, not only a pretty face and logo. They need authenticity and transparency. They are tough to deceive, and trust acquired valuable on social media platforms.
Reviews are critical. Having your store listed on Google My Business and other directories makes the difference as brands with no reviews whatsoever are less likely to be trusted.
Retail is not dead, and this is what you need to do next
Starting with a website and a social media presence is excellent, but that’s not enough. You must rethink the strategy with a scarcity model or experience-oriented model in mind. Younger people need to feel special and prefer a brand that valorizes them. It requires thinking and working on a different level. You switch to a state when you start involving your audience in your creation and distribution strategies. Often, external help and transversal project management with influencers and customers will make the difference for a brand.
Personalization and experience are crucial to success. Suppose you manage to give your clientele a luxury type service with a product that respects the environment and is locally sourced with a smaller provider. In that case, you are doing good for the client and doing good for the planet; you have built for yourself a winning strategy in the millennials hearts.
In definitive, retail is not dead but needs to integrate the digital to make it in the future. Retail managers and whop owners must take ownership of the web revolution, but they should also influence their workers to do the same. The retail of the future holds numerous fascinating opportunity for people focussed on customer care. Their jobs will be directed to physical sales and act as brand ambassadors for the company they represent. We could imagine a future position in the retail field to be at the crossroad of a regular employee and an influencer job.