Doug Stephens, founder of Retail Prophet, respects Marc Andreesen, the co-founder of Netscape, an early investor in any big tech funding venture in the past few decades and a board member for top players such as Facebook, eBay and HP. Stephens just doesn’t agree with Andreesen’s declaration that retail is dying, near dead or that “software eats retail.”
Here’s what Andreesen told Pando in early 2013 regarding the “pre-death” retail realm:
“Retail chains are a fundamentally implausible economic structure if there’s a viable alternative…Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves. There is fundamentally a better model.” And then this: “Malls are going under, and there’s more to come…I’d bet on the pure plays in ecommerce…Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice.”
Now, three years later, Stephens is happy to share insight on how retail is not dying, it’s not dead, but it is undergoing a huge transformation.
That was the focus of his keynote that kicked off the Interactive Customer Experience Summit 2016 in Dallas late last week. Stephens is the author of “The Retail Revival: Re-Imagining Business for the New Age of Consumerism,” and is a nationally syndicated retail columnist for CBC Radio. He also co-hosts the popular web series, The Future In Store.
While acknowledging that some industry facts support Andreesen’s view — 1.67 trillion in ecommerce business in 2015, a 25 percent growth in ecommerce, China’s Singles Day event in which 3.9 billion of sales by Alibaba was transacted in the first hour on Alibaba alone, Amazon now capturing 60 cents on every incremental dollar spent online — Stephens pointed to strong data supporting how retail is not dying a fast death.
Retail is evolving as emerging technologies, such as virtual reality and the billions of connected devices, from pills to clothing, are being integrated into the retail environment.
The advent of the Internet of Things is leading to a “replenishment economy” with increasing direct-to-consumer sales. Retail apps will go by the wayside in what he termed the “app-ocalypse,” which will represent the new frontier of direct commerce.
At some point, a virtual assistant will replace that all-important app and bring about a retail experience revolution.
“Shopping isn’t just buying and pushing a button. It’s a discovery process. That’s why you see pure play etailers moving into the mall, they want that eye-to-eye connection with consumers. There will be stores long into the future but everything about these stores is changing over the next decade,” Stephens said.
Basically, the rules of retail are changing. Stephens points out 50 percent of all retail transactions will be influenced by mobile in 2017, according to a Forrester report.
“The consumer is in control of the experience,” he said.
The store is everywhere — an ad, on a billboard, on a smart TV or in a YouTube. The media is becoming the store, so retailers have to do things differently, said Stephens, who urged brick-and-mortar retailers to look at their stores, not solely as means of distributing products but more importantly as a channel through which they can distribute remarkable live experiences.
“Retail is becoming phygital. For millennials the experience is more important than the products,” he added.
The new model also brings new metrics, from social activity to product interaction. It’s no longer solely about sales per square foot but rather about experiences per square foot, per hour, per associate.
“How you sell what you sell is a differentiator,” he said. “Don’t start with tech for tech’s sake.”
Instead, Stephens suggested that retailers start with the customer experience and then bring in the tech to bring that experience to life.
“It’s about going first, learning, being willing to break the rules. Don’t wait until someone else has proved it works,” he said. “It’s the most inspired time in retail.”
Reprinted with permission from www.RetailCustomerExperience.com
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