Welcome!

Article

The Re-alignment of Retail

Retail thrives in 2018, but what's different is how things are being sold

 

It happens to every industry eventually, whether it's agriculture, automotive, manufacturing or retail. Shifts in demographics and buying patterns, the availability of automation techniques, and more recently, the growing impact of ecommerce bring about massive re-alignments which disrupt the economy. These patterns are nothing new, and the most recent industry to see such massive re-alignment is retail.

Make no mistake, it's not, as pundits claim, a "retail apocalypse." Retail is alive and well, consumers continue buying things, and retailers continue selling them. What's different is how and where those things are being sold.

The re-alignment of the retail industry is occurring in four areas: the growing influence of ecommerce, automation and smart store technology, a shift away from cookie-cutter malls and superstores, and the dominance of online-only retailers like Amazon. Those four areas are not, as some may proclaim, the Four Horsemen of the Retail Apocalypse. Rather, they are simply part of a necessary and inevitable re-alignment in an industry that continues to grow.

The growing influence of ecommerce

Retailer strategy at one time depended on a constant growth in new store openings and a heavy presence in shopping malls throughout the country, but that exclusive brick-and-mortar focus is no longer viable in a world where consumers want to shop from their smartphones. Sears, once the mainstay of shopping malls throughout the country, made the mistake of thinking that their strategy, which consisted mainly of being a shopping mall anchor, would continue to be valid – yet the company may not survive the year.

The company's online strategy was practically nonexistent, and the biggest mistake this retailer and others made was to see the online channel as secondary to the all-powerful brick and mortar mall store. Those retailers who are enjoying success see online as equal to brick-and-mortar, and place just as much emphasis and development money into building a sophisticated online channel.

Some prominent retailers have embraced a different type of strategy – creating a physical shop with a unique offering, while also building a strong online presence. Stadium Goods, a premium sneaker and streetwear marketplace with two locations in Manhattan, has created such a strategy. A veritable temple to sneakers, Stadium Goods is home to the type of high-end sneakers such as Kanye West's hard to find Yeezy's, that you can't find at the cookie-cutter mall stores – and while the shop has created an incredible in-store experience, along with videos of popular rap stars shopping in the store – the online experience also serves the customer, giving shoe shoppers outside of Manhattan a look at some of the latest hard-to-find designs.

Automation and smart store technology

The Amazon Go store, a fully automated grocery store, has been in pilot stage and open only to Amazon employees until this week, when Amazon will open the checkout-free shopping experience to the public. Shoppers simply scan their smartphone app as they walk in, pick up what they want, and walk out.

Kroger's new Scan, Bag, Go service, which the grocer expects to offer in 400 stores this year, doesn't go quite as far as Amazon, but it's on the same path. The app lets shoppers scan items with their smartphone or a hand-held scanner as they place them in the cart, and then pay when they're done just by scanning the app at a self-checkout station.

By comparison, specialized stores serving a very specific niche audience succeed by heightening the personal customer experience with live, human staff – for example, Stadium Goods is frequently the subject of the popular "Sneaker Shopping" YouTube channel, where celebrity shoppers (such as Ski Mask The Slump God) are seen enjoying the buying experience.

The re-alignment will not involve wide-spread full automation and massive elimination of retail jobs, rather, it will be about striking a balance between automation and customer service, and using those automation tools to enhance – rather than replace – the human customer experience. "When you go into a store, there is a certain expectation that there is going to be personalized service, and that there is going to be someone to talk to," said Michael Witty, Director, Retail/CPG Digital Practice at ISG, a global technology research and advisory firm. "The question is, how automated can automated be? There is a balance between the millennial generation who are really comfortable ordering online and with self-service apps, and those who prefer to go into stores and touch and feel the product, and speak to a person and what the alternatives are. The majority of purchases still happen through personal interaction in a store at one level or another."

Cookie-cutter malls and superstores

Large shopping malls, anchored by major retailers, are not as popular as they once were, and consumers have grown weary of seeing identical malls with identical stores in every town. The bloom is off the rose, and the era of the cookie-cutter shopping mall and superstore is drawing to a close.

What consumers expect in a shopping experience has always been a moving target. Shopping malls are past their peak, and consumers have grown bored with them. According to Witty, " The feel is the same wherever you go. "If you go back and look at what happened twenty years ago, there was a huge buildup of retail, and lots of malls built in suburbia and lots of strip malls in rural areas. There was an oversaturation in the market given today's demographics and where today's spendable income is. There is two kind of pressures, overcapacity in cookie-cutter malls and less foot traffic, and closings of those stores which can't differentiate themselves and provide a real experience or the customers – they are caught in the shutdowns."

Today's retail re-alignment may be bad news for retailers who haven't been paying attention. Shopping malls with the same shops, same food court and same look and feel are as out of date as shoulder pads and mullet hairstyles, and consumers want something new. What's more, they want automation, but only up to a point, and they don't want automation simply for automation's sake in an environment which completely upends the personal customer experience. The future of retail will look very different in ten years, but it will be better, more personalized, and more convenient than ever.

More Stories By Dan Blacharski

Dan Blacharski is an IT thought leader, advisor, industry observer and editor of "NewsOrg.org. He has been widely published on subjects relating to customer-facing technology, fintech, cloud computing and crowdsourcing. He lives in South Bend, Indiana with his wife Charoenkwan and their Boston Terrier, "Ling Ba." Follow @Dan_Blacharski

Latest Stories
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
Sometimes I write a blog just to formulate and organize a point of view, and I think it’s time that I pull together the bounty of excellent information about Machine Learning. This is a topic with which business leaders must become comfortable, especially tomorrow’s business leaders (tip for my next semester University of San Francisco business students!). Machine learning is a key capability that will help organizations drive optimization and monetization opportunities, and there have been some...
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.