Turbulent times for retail.
Between 3D printing, augmented reality, e-fitting rooms and headsets that can measure consumer brainwaves, technology is changing the face of retail. That was the overarching theme of Dx3 Canada, a conference in which the Canadian Retail Industry was very much in the spotlight.
30% of all spending by 2022 is projected to be online. Traditional retailers are losing money and closing stores left, right and centre. The so-called category-killers of the 80s and 90s are getting killed. Canadian retailers face increased pressure from cross-border and international competition. The supply chain is controlled not by distributors or retailers but by consumers. These are turbulent times for the Canadian retail industry. How, then, can retailers adapt?
“Culture of divine dissatisfaction”
David Labistour, CEO of Mountain Equipment Co-op, urged retailers to embrace a “culture of divine dissatisfaction” and to constantly strive to reinvent themselves in the face of an accelerating pace of technological change. “Keeping the culture plastic” is what he identified as his best piece of advice – and biggest daily challenge.
Doug Stephens of Retail Prophet used the term “phy-gital” to describe how retail is increasingly occupying the space that merges the physical and digital worlds and claimed that average is simply not good enough anymore given the high expectation of today’s informed consumer.
Alan Huggins, President of Lowe’s Canada, argued that retail has been evolving since the calculator replaced the abacus and the elevator created the first skyscraper; it’s the rate of change, not the change itself, that’s new. Local markets gave way to department stores, to speciality stores, to category killers and big box stores, and finally to e-commerce experiences, but it’s a logical and ever-evolving journey. We’ve been here before, was the message, and those of us who embrace change instead of fighting it will come out ahead.
We’re still people.
For retailers who fear that the rate of change will spell the end of their business, never fear: All agreed that there is a bright future for retailers who embrace the future.
Kelly Jones from Microsoft presented the results of an in-depth worldwide research study into retail shopping to argue that there’s a place in mobile and digital to engage both the head and the heart. Until now, she claims, most businesses have focused on the head, delivering very functional experiences via mobile, such as location apps and coupons. But there’s a place to engage emotionally with consumers too. People relate to their mobile device as their “Lover”, Jones argued. It’s the first thing they look at when they wake up in the morning, the last thing before going to bed, and if they lose or forget it they feel like they can’t function. Furthermore, she pointed out that most people view ratings and reviews after they purchase a product, not before; they’re seeking validation, not information. She challenged marketers to think beyond the functional when crafting mobile experiences, and urged them to tap into these very basic human emotions.
Doug Stephens agreed. He argued that people “don’t just shop to acquire things; [shopping] is an embedded social need.” He pointed to pure-play digital giants such as Google and Amazon setting up flagship physical stores as an example of how online is going offline. Stephens envisions a future where the retail store will still be relevant, but its purpose will change from a distribution channel designed to sell goods to a content channel designed to sell brands or experiences. “Nobody needs what you sell,” he claimed, “but they need why and how you sell it”.
Alan Huggins also believes that shopping fulfils a social need. “People are social creatures,” he claimed. “They go to the store not to buy but to interact and experience.” He pointed to the fact that the average coffee shop is full 24 hours a day of people who are out to drink coffee and mingle, instead of simply buying it at home. He believes that despite the growth of e-commerce, there will continue to be a place for the retail store as a place to meet, interact and experience, just like market day in early agrarian societies.
Ultimately, the message was that, despite the dizzying pace of technological change, we’re still human beings. Everything about retail will probably change, but people are still people.
Interested in finding out more? Contact DAC today!
Sari Stein, Digital Strategic Planner