Some love the “retail apocalypse” narrative. It’s great clickbait, makes for captivating keynote speeches and gives consultants a hook to peddle complicated strategic frameworks. Alas, it’s mostly nonsense. Physical retail is definitely different, but it’s far from dead. The fact is plenty of new stores are opening, many traditional retailers and — I hope you are sitting down — even quite a few malls are doing great. Brick-and-mortar retail sales are likely to be up this year, just as they were last year.
Some retailers love hearing this alternative narrative because they think it means they will be okay, that they don’t have to change, that there is some storm they just have to ride out. Unfortunately, that is not only nonsense, it is dangerous nonsense. While physical retail is not dead, virtually every aspect of retail is changing dramatically, as this excellent pieceby Doug Stephens points out. While I believe Doug overstates a few things, his underlying premise is on the money. Almost everything has to change and the key thing to understand is that the future of retail will not be evenly distributed. Stated simply: yes, some brands will do well. But many others will struggle mightily, others will be eviscerated and quite a few are dead already, they just don’t know it.
Physical retail is not going away but unremarkable retail is getting hammered. The brands that relied on good enough are learning the hard way that good enough no longer is. The mediocre brands that were protected by scarcity of information, distribution and access are getting blown apart as the customer can now get the same product anytime, anywhere, anyway — and often for less money. The brands that tried to stake out a place in the vast wasteland between cheap and special are losing as retail becomes more bifurcated and it’s increasingly clear that it’s death in the middle.
By now, a few things should be abundantly clear:
Just because physical retail isn’t dead doesn’t mean you don’t have to change.
On average, more than 80% of retail will still be done in physical stores in 2025. Unfortunately, you can’t pay your bills with averages and your mileage will vary. The way the migration of sales away from physical stores to online will affect your competitive situation and marginal economics can have devastating consequences. Even small shifts can require the need for radical reinvention.
Stop blaming Amazon.
hile there is no question of Amazon’s dramatic and growing impact upon the retail ecosystem, most of the retail industry’s problems today have nothing to do with Amazon. Overbuilding, excessive discounting, boring product, unremarkable experiences and a fundamental lack of innovation are the main reasons that most retailers are struggling today.
It’s not just about e-commerce.
You can’t out-Amazon Amazon.
Pop quiz: Are you Walmart or Target? No? Okay, then stop trying to out-price, out-assort and out-convenience Amazon. To paraphrase Seth Godin: the problem with a race to the bottom is you might win.
Unless you are on the short list of brands that can be just about everything to everybody (and actually make money) your task is to get hyperfocused on a set of consumers for whom you can be intensely relevant and remarkable at scale. That likely means being far more experiential and blending the best of online and offline in a compelling and harmonized way.
Be prepared to blow stuff up.
Remarkable is easier said than done. And most retailers suffer from bringing a knife to a gun fight when it comes to innovation. Much of what got us any level of success in the past isn’t going to work in the age of digital disruption. New thinking, new processes, new technology, new metrics and new people are table-stakes on the path to retail reinvention.
As the Chinese proverbs says, “the best time to plant a tree was 20 years ago. The second best time is now.” Chances are you’re already behind and it’s far later than you think. The only choice then is to get started. Now. And go fast. Fail fast. Rinse and repeat.
The big problem is we think we have time.
A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts and follow me here.
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Originally published at stevenpdennis.com on September 17, 2017.