Is Retail in Trouble?
Is Retail in Trouble?
We’ve all heard the story. The retail apocalypse is upon us. Stores are closing by the hundreds, the thousands. Retail chains are going bankrupt, reporting losses by the millions. Shopping malls are emptying, customers flocking to online retailers like Amazon. We’re living in the end times for retail.
But is that really the case? While retail is in the midst of a massive disruption, what’s happening isn’t an apocalypse; it’s growing pains. Retail is changing, and those that are using new technologies to adapt to this change are thriving, while those that aren’t are struggling.
Disruption in Retail
E-commerce is certainly making an impact on the way that brick-and-mortar stores are operating. E-commerce spending is poised to increase in 2017 by somewhere between 8% and 12%. Many media outlets point to Amazon as the ultimate retail disrupter, and, to be fair, Amazon is certainly making an impact on the retail ecosystem. However, Amazon’s role is not quite as pronounced as it seems, as online shopping still only makes up less than a tenth of America’s total retail sales.1 There is a lot more that is shifting in retail and creating this disruption, and much of it has to do with the increasing role that technology is playing in how customers interact with stores.
We’ve already written about how technology is changing what customers are looking for in their shopping experiences:
- Experiential retail is becoming hugely popular, as it is a way to create unique experiences for customers, differentiating a store’s brand from others.
- Generation Z has technology integrated into every facet of their lives and is bringing that into their expectations for retail shopping.
The disruption in retail comes less from e-commerce itself and more from what today’s customers want from a shopping experience in the digital age. With Millennials as retailers’ largest demographic and Generation Z as a demographic with $44 billion in buying power2, retailers need to plan for a consumer base that expects a retail store to accommodate how technology now plays a massive role in everyday life.
And as some retail stores struggle with providing what these demographics want, they’re beginning to shut down.
Investing in Technology
So does this mean that we’re entering the retail apocalypse? Not quite.
Retail stores have been underinvesting in technology for a long time, and now that we’re seeing the adverse effect of that, retailers are trying to catch up, investing more time and money in different technologies.
There are many different ways that retailers are investing in technology:
- Augmented reality
- Virtual reality
- Mobile payment
Many retail chains have been looking at ways to innovate the customer experience through giving them technology to use, but it’s just as important to make sure that it’s not just the customer who is armed with technology. Store managers, store associates, and the store itself need to be armed with technology as well.
Innovating Store Operations
Retailers need to invest in technology that streamlines store operations, making stores efficient and productive enough to cater to today’s customers.
There are different kinds of technology offerings that can accomplish these goals:
- Task management software can save retailers millions by streamlining store communications, providing corporate chain-wide visibility into task completion, and preventing task overload at stores.
- Real-time store operations software can enable store managers and associates to notice and respond to major trends and unplanned interruptions in store operations, increasing store efficiency and averting potential disasters.
Retailers that are investing in real-time store operations solutions are typically staying ahead of this trend. In Paula Rosenblum’s recent Forbes article about the myth of the retail apocalypse, she notes that thousands of retail stores are opening in 2017, with names such as Dollar General, Autozone, Ulta, and TJ Maxx leading the way. A recent CNBC article notes that stores like Target, Dick’s Sporting Goods, and Aerie are also opening stores this year. All of these companies are using Reflexis task management, workforce management, or real-time store operations solutions to streamline their store execution, saving millions so they have the ability to expand.
While retail is going through a major disruption, this isn’t the grand apocalypse that many are making it out to be. Customers are expecting stores to reflect the way they engage with technology, and if retailers want to stay relevant, they need to use technology to evolve.