Steve Dennis is a contributor at Forbes. He writes about the reinvention of retail in the age of digital disruption. We have previously featured his articles about omnichannel retailing, branding and more in MIAnews, and we have had the feedback that they’ve been timely and informative. Here are some of Steve’s predictions for the world of retailing in 2019…
We have previously featured four more of his articles in MIAnews that you may also be interested in:
Below are the predictions that are also relevant for UK retailers. The full article can was featured in Forbes and you can read it here.
- Apocalypse? No. Yes 2018 was yet another year of massive store closings and retail bankruptcies. And while I expect the pace to moderate this year we will still witness many hundreds of store closings and several major Chapter 11 filings. Yet it will become crystal clear to all but the most click-bait hungry that much of physical retail is pretty darn healthy and that the overall idea of a retail apocalypse is ridiculous . In fact, in addition to the more than 800 stores that digitally-native vertical brands (DNVB’s) will open,traditional retailers will open thousands of stores and brick & mortar overall sales will be positive.
- The collapse of the middle continues apace. Repeat after me: Physical retail isn’t dead. Boring retail is. Which is why we continue to see the vast majority of store closings and bankruptcies concentrated among those brands that remain stuck in a sea of sameness. In an era of digital disruption failure to be remarkable eventually leads to failure as a going concern– as Sears, ToysRUs and others learned all too well. Good enough no longer is. Retailers that fail to pick a lane and execute against the essential elements of remarkable retail are on their way to the retail graveyard.
- The stores strike back. It turns out that when retailers see their stores as assets to be leveraged rather than liabilities to be optimized–and recognize that the customer is the channel – the combination of strong digital capabilities and re-imagined brick & mortar is often pretty powerful. Walmart, Best Buy, Nordstrom and others accept that silos belong on farms and that by embracing the blur they can drive superior outcomes, even in the face of Amazon’s growing presence. Well harmonized customer journeys can often be superior to anything that online-only brands offer, particularly when the unique advantages of brick & mortar are done right.
- The emerging BOPIS crunch. It’s been clear for awhile that BOPIS (buy online, pick-up in-store) offers something many customers want, while also holding the promise of mitigating retailers’ growing costs of direct-to-customer fulfillment. It can also drive incremental store visits. By one estimate holiday BOPIS sales up 47%. and we are seeing a sharp uptick in retailers that are implementing this capability. The only problem is that many brands are not ready to handle this out-sized growth. In most cases doing BOPIS well puts pressure on processes and staffing while challenging the ability to dedicate convenient and adequate space. The complexities of BOPIS will wreak havoc with quite a few retailers this year.
- Shops as theatres. More and more it will seem like all the store’s a stage as brands create highly immersive and memorable experiences that can only be found in their brick & mortar locations . Some will be highly focused like Canada Goose’s “cold rooms.” Others will introduce theatrical elements on a grander scale like Nike’s House of Innovation, The key will be to avoid gimmicky “lipstick on the pig” approaches and, instead, deliver something highly relevant, on brand, Instagram-worthy and remarkable.
- Better metrics start to emerge, albeit too slowly. Nearly a year ago Brent Franson and I wrote a piece that argued that “The Reinvention Of Retail Demands New Metrics.” While I am aware of a few companies that are moving away from the obsession with comparable store sales and sales per square foot that don’t properly account for the effect of stores on digital channels and vice versa, there isn’t a lot of traction here. And given retail’s slow moving ways I doubt the industry will have an epiphany by year’s end. But it needs to happen. Now.