By Amy
Erixon, Toronto
The annual Las Vegas
Shopping Center convention was a showcase for the degree to which advanced
technology can be expected to profoundly affect the retail landscape in the
years ahead. These trends are already having a radical impact on retail
behaviour and players in the US, Europe and Asia. (For example, the subway
walls in Korea are covered with scan-able advertisements to permit busy
commuters to order on-line on the fly with their smart phone). Canada is a
decade behind.
I’d like to focus on
three themes for this report:
·
Disruptors –
o
Innovation is in full
force every direction you look
o
Price elasticity,
advertising and distribution are all being radically affected by smart-phone
technology and social networks – on demand delivery of goods is available in
England
·
Disruption–
o
Wholesale Turnover of
over half of the Leasing Floor over the past 5 years- owners as well as tenants
– the recession took a toll and technology will reshape it further
o
Playing catch-up,
evolving business models, even Wal-Mart allows third parties to sell and
distribute via its internet shopping channel – where 40% of shoppers pay with
cash
·
Differentiation-
o
Go big or go home –
Amazon is the cloud provider for both NASA and Apple, and their sales are
expected to eclipse WalMart by 2017. Samsung is the largest grocer in Asia and
will soon be offering financial products to North Americans. This is indeed
becoming “Clash of the Titans”.
o
If you are small and
not ready to quit - focus is on maintaining relevance, delivering personalized
service and/or customization, controlling and promoting your brand and
reinforcing via social media to maintain customer loyalty amidst a dive to the
bottom on price.
Can you imagine
crowd-sourcing your retail merchandising plan? Have you heard of a “pop-up
store”? Would you consider attending social networking events at your local
grocery and drug store or using a drive through internet pick-up window at
Whole Foods to save time? These concepts are not new, but they are being
employed by surprisingly traditional retailers who are enjoying some degree of
commercial success, especially in rural locations (perhaps in some way
connecting better and more locally with their customers ). Welcome to the brave
new world in retailing that is unfolding.
This is not a matter
of “clicks” vs. “bricks”. This movement is about integrating new media outlets
and tools to drive traffic, obtain and manage data and operate as well as
promote your stores (i.e. manage the customer experience). Not surprisingly,
the traditional brands with the deepest catalogue history were the early
winners in converting to on-line retail; they had the infrastructure and are
accustomed to presenting and distributing merchandise remotely. But in recent
years big names in internet sales such as Apple have mastered how to present
physical stores with such a“Wow” factor they sell more hardware that is only
compatible with their applications - which in turn drives market share across
the entire cloud based platform. What’s next for Apple: a new TV device to
revolutionize that media, one more venue to control what information and
advertising you receive, in addition to directing how you use their devices to
manage your world.
If you are a landlord,
be mindful a great deal of disruption is ahead, both seen and unseen. As an
industry the leaders are starting to think about how to capture on-line sales
at point of source (have we already been dis-intermediated by Facebook and
E-bay? We have witnessed the near demise of the bookstore, and the rise of
stores that double as service centers by telecom providers. Stay relevant by
ensuring your centers offer a “treasure hunt” experience, some entertainment as
well as staples to get people to come and then stay. Help your retailers with
getting up the curve, before it is too late.
If you are a retailer, time to educate yourself and get there
fast. Your website may be more important than your storefront, and your prime
advertising audience might have shifted venues while you weren’t paying
attention. Think about how you will provide your customers with sense of
“community” or unique, one-of-a kind products or experiences? Have you asked?
Have you considered a rolling charity event or sponsorship or a celebrity
make-over day? Is your store “cool”, and lastly, is it welcoming to people who
are more interested in playing on their cell phone than talking to a person?
Now is the time, get going!
