Adapt or die. Five disrupters that may trigger retailer's decline

17 November 2014

Dubbed the second oldest profession in the world, retail is nevertheless prone to changes. The factors that contributed to the demise of some retail establishments are still at work and those reluctant to adapt are doomed to extinction. Businesses dreading the thought of joining "retail dinosaurs" should better watch out for these major trends which are likely to trigger another wave of retail victims.

Darwin's law of survival appears to apply to retailers as well as natural species. Indeed, it is not the strongest of the species, nor the most intelligent that survives, but the one that is the most adaptable to change. Dinosaurs provide a great analogy for some of the retail tycoons who were wiped out from the face of the earth in recent years. Many of such retail establishments used to dominate their category before they became extinct due to their inability to adapt to new circumstances. Retail innovators, who failed to spot new disrupters on time, shared the fate of retail moguls. It seems that neither longevity, nor size or specialization can guarantee retail survival.
Retail is nowadays subject to many disruptive changes. In fact, it has changed more in the last three years than the previous thirty. So what are these key trends that retailers must adjust their businesses to if they do not want to go belly up?

Omnichannel

Probably the most important source of change in retail, a consumer nowadays shops anytime and everywhere. Brick-and-mortar stores may remain a destination for experience, but it is the online search that is the starting point for majority of consumers. Consequently, retailers must perfect both their online and offline offerings, at the same time connecting with the consumer across many touch points, including social media.

BOPIS

For those who may not be familiar with the term, BOPIS stands for Buy Online, Pickup In-Store. It is used to describe consumer's expectations. However, they now tend to exceed BOPIS as over fifty percent of consumers expect to shop online and see if stock is available in store. This not only calls for a new integrated technology, but re-engineering of processes and resource allocation. Only then retailers can capitalize on the omnichannel shopper who is now in charge of both where they make a purchase and where they take delivery.

Virtual Aisle

Speaking of BOPIS, the reverse of it is equally significant. Omnichannel consumers now fully realize that stores cannot begin to stock every model, style and color. Consumers can see thousands of products in store, but at the same time they are know that there are millions of them online. Having realized that brick-and-mortar stores are turning into distribution points for online, retail giant Walmart started to set up smaller stores, which are less expensive to run. However, if a small store is to be successful, it must be able to provide the consumer with an "endless aisle" through a virtual shelf. The very best disrupters are literally creating a seamless experience between online, store and mobile apps to accommodate for nearly every whim of a connected consumer.

Consumer in-store experience

E-commerce giants like Amazon helped to drive the previous retail dinosaurs to extinction based on price and selection. At the same time, Amazon also launched a new trend and set up high standard for consumer-centric experience and service. Once consumers have become able to shop anywhere for the lowest price, products turn into commodities. Retail dinosaurs are now faced with a daunting challenge in the form of a product-centric heritage of building big-box stores for displays. It is worth remembering that the main reason why today's consumers shop in-store is the experience and interaction with the store's staff.

Customization

Connected consumer is able to access retail worldwide, with practically no limits. Choices abound in a new connected world. It has become more of a challenge to attract a consumer. Innovative pioneers like Nike demonstrated that one way to stir consumers' interest in a brand is to offer them customization options. It turned out that consumers valued and were willing to pay for designing their own customized shoes. New disrupters are emerging with "mass personalization" opportunities to custom tailor your clothes, or curate your personal wardrobe assortment and send it to you. Take Etsy. One of the fastest growing online retailers, the brand enables artisans to sell very personalized goods, even made-to-order styles, to millions of consumers worldwide.

Sources: http://www.retailcustomerexperience.com;
Photo: http://en.wikipedia.org/