Today I bring to you an article from Mark Elgan, a contributing columnist of Computerworld, in which he discusses the imminent changes in the retail industry. On one hand, in recent years the retail industry has faced a series bankruptcies which lead to the closing of big retail physical stores bellowing to some of the biggest brand names in the industry such as, J.C. Penney, RadioShack and Macy’s. On the other hand, online shopping has been booming in developed countries such that in the US it is predicted 40% of this year’s holiday gifts will be shopped online.
Companies like Amazon dominates the online market and strive to find new ways to improved customer online shopping experience. However, this year Amazon bought Whole Foods a grocery giant in an attempt to follow a new strategy for opening physical stores of different types. Google another online giant plans to open flagship stores to sell their products. Like this, a prominent question arises, why are successful online retailers rushing into brick-and-mortar stores?
According to the author, the retail apocalypse is nothing but a story which has started to grow based on the conception of mall industry’s past failure in the US. The author points out the latest National Retail Federation prediction which points out that physical retail is expected to grow about the same as online retailing. The reason for this is that customers still enjoy the experience of physical shopping. However, nowadays customers are ever more demanding on the type of experiences they want which make Omni channel retail stores, such as H&M and Forever21, a huge success thanks to their bet on data-driven strategies, personalization and app.
In my opinion, people want the best of both worlds. They want convenience. They want personalization. And, they also want the chance to experience the moment. I believe that people are still uncomfortable in buying certain goods online due to the fear of fraud which makes them not discarding physical stores. However, I think that is crucial for retail companies to adapt to current cultural and technology trends, balancing the need the to own a physical store and the necessity of being present online.
Concluding, I agree with the article for the most part, but in the long term, physical stores will lose what in my opinion is their key advantage – experiencing the moment – has technological advancements will allow online shopping to be closer and closer to the physical experience and when in the same position online retailing will win for its convenience. And you, what is your opinion on this subject? Do you think physical stores are a thing of the past or is there a place for them in the future?
Source: Elgan, M. (2017, October 21). The ‘retail apocalypse’ is a myth. Retrieved October 22, 2017, from https://www.computerworld.com/article/3234567/it-industry/the-retail-apocalypse-is-a-myth.html
Hey Ana,
Great Article! And very interesting perspective on the rise of the online storefront and the demise of the brick and mortar. I think there is certainly a place for physical stores in the future. I think as you mentioned the experiential nature of them is still very much necessary and you’re starting to see brands like Amazon and Microsoft opening up a store of their own in order to provide that more tangible experience for their customers. People like an opportunity to engage with a brand using all of their senses and a storefront provides that in a more tangible way than an online storefront can. In this way I think they will always be around, but I think it will center less around the “shelf space” and how many products you can shove into a store and sell, and more around how you can create these consumer brand touchpoints in a way that engages your relationship with your customers.
Hi Ana,
This is a great article and a very interesting blog post! In some ways, I think that it is amazing that physical stores have continued to last for this long; however, I often think the same thing about the book industry, which is showing a similar trend. Despite the ease and cost-savings that online book shopping provides, people are still drawn to the experience of reading a print book, as well as the experience of shopping for it in stores. Publishers and retailers alike are having to find new ways to sell their books using both channels, which I suspect is also the case for retailers.
One of the most interesting stories I have heard about this trend in retail is Nordstrom’s new concept for a clothing store with no actual merchandise. The idea is that Nordstrom will offer an experience with shoppers working with personal style guides to develop a personalized wardrobe with sample clothing and styles provided in stores. Customers can then order the pieces they have selected online for delivery to their home or one of the Nordstrom stores. What makes this concept interesting is that it provides the personalization and options that you mentioned; however, it also allows for retailers to: reduce the size of stores, reduce employees needed to run the store, and take advantage of the online personalized experience without losing their “brick and mortar” preferring customers. I think it will be interesting to see how many stores attempt a similar approach in the coming years.
Very interesting discussion topic!
Allie
Reference: https://www.washingtonpost.com/news/morning-mix/wp/2017/09/12/nordstroms-wild-new-concept-a-clothing-store-with-no-clothes/?utm_term=.e98eba512fee