FEATURE ARTICLE: Retail’s Pretty Great Year: 10 Harbingers of Happier Times Ahead
“Retail Apocalypse?” Nah
It was a scary year for retail, even by retail standards (which are already quite scary). As retail raced through a series of disruptive events in 2019, it was hard not to catch the doomsday bug (and even resort to overhyped terms like “retail-pocalypse” to describe it).
Beloved chains shuttered operations, more than 9,000 stores permanently left the planet, and Amazon relentlessly set new baselines for everyone else. Tariff wars threatened to deal a final blow to wholesalers and retailers alike, and it was difficult not to feel stirrings of dread as near-death experiences became the norm.
But this is no time to throw in the towel – there was plenty of good news mixed in with the tumult and much of it points to better days ahead, regardless of how individual efforts pan out. The following are ten shifts that took root in 2019 and set the stage for a brighter 2020:
Target turned a corner. It didn’t come cheap or blip-free, but a combination of store investments, new category calibrations, brand buildouts, and next-level partnerships have helped Target regain traction. More than anything, Target is leading by example as it departs from its safe schemes of the past and abolishes insular thinking. Old dogs can learn new tricks.
Digital natives are nesting. The number of digital-native brands that have landed on terra firma, whether through partnerships, owned brick-and-mortar, or dedicated concepts, keeps escalating. While some will make it and some won’t, even Amazon now knows that true scale can’t be achieved in a single digital channel. The store is still the core.
Talent is travelling. Remember when the same lineup of leaders kept popping from retailer to retailer? Thankfully, it’s happening far less frequently. Retailers are breaking free from old industry, channel, gender, and category criteria to find the leaders of tomorrow. Some of these folks already made their marks, while others have yet to pave new paths. New faces will bring retail some much-needed new thinking for years to come.
Fresh is flourishing. Retailers from dollar to drug stores have been dabbling in the fresh category for a while, yet it’s often been treated as a necessary evil. Now, retailers are going all in to bring it to life. Walmart’s revamping its produce sections, store-based mini-farms are starting to sprout up, and stores like Albertsons and Loblaw have been exploring micro-fulfillment centers that promise to improve overall availability and convenience. Healthy, convenient, competitive choice – what’s not to like?
Frenemies are formidable. Retailers are no longer dabbling in nonthreatening alliances. Whether it’s Kohl’s contrarian hookup with Amazon or Walgreens and Kroger joining forces to pump up purchasing power, partnerships are becoming more daring. The good news is that the paranoid days of retail’s past are fading fast. Collaborations breathe new life into outmoded models.
Expertise is outsourced. Retailers are ditching DIY and getting chummy with experts that can mutually accelerate innovation. Cooperative hookups with supplementary services are driving delivery solutions, fueling sustainability’s next act, and more. Retailers finally realize it’s healthy to reach out when they can’t make something happen in-house.
Flagships are flying. Small formats are still all the rage, but mega-showcases are back in force. While flagships used to be a high-risk money pit, they’ve since evolved into fertile ground for experimentation, data gathering, and brand storytelling. Their imposing presence also drives awareness that can goose digital sales. Flagships are ushering in the digital rethinking of retail and giving bricks some new tricks (see also #2).
Brands are Driving D2C Destinies. Nike’s decision to cut ties with Amazon to focus on its own direct-to-consumer platform sends a powerful message (even if it can’t entirely eradicate Nike’s presence on Amazon). Platform partnerships don’t have to last forever, and sometimes building makes more sense than bridging. Grab-what-you-can-get brand ubiquity is being tempered by discretion and focus.
Convenience is climbing. Retailers attempting to force consumers into amenities that are easier to execute or more profitable had to learn the hard way that the customer comes first. Click and collect, kiosks, drive-up, drive through, curbside, same-day, and every way – we’re living in an all-of-the-above world now. Although it’s complex and challenging for retailers to coordinate, consumers come out the winners.
Multi-testing is a mandate. A few years ago, pundits would have scoffed at drone delivery, autonomous vehicle dispatches, and robotic warehouses. Some still are scoffing, but they won’t be for long. The game has changed as retailers shift from placing safe bets to jumping in and then scaling (or failing) fast. They’re getting comfortable with speedy speculation.
Retail Future
We can say this for retail: It may be moving at a breakneck pace and taking forms few would have imagined, but at least it’s keeping everyone humble in the process. As Walmart CEO Doug McMillon recently said in an unguarded moment: “We could go away at any minute.” This is true of anyone, and the only solution is to move boldly forward in ways that would have never worked before today.
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