Features, The New Rules of Retail

Matthew Shay, President and CEO of NRF, Needs a Wake-Up Call

NRF President and CEO Matthew Shay recently published an article on LinkedIn entitled, The 3 Worst Articles on the Retail Apocalypse – And Why They’re Wrong. While I run the risk of biblical-sized smiting from the gods of the retail establishment, I cannot hold my tongue on this one. Shay’s post could not be more tone-deaf. His article strikes the exact wrong tone at the exact time we need him most. Consider this your wake-up call, Matthew Shay and NRF. That sound you hear? It’s your iPhone ringing at the side of your bed telling you it is time to start leading differently.

Shay’s Position

Read Shay’s piece for yourself. You decide. Am I just prone to hyperbole? Or, is it right to expect more of our leaders?

Shay’s position in the piece is simple. First, he argues that the “Retail Apocalypse” is overstated, that retail is thriving and coming off its best holiday in years, and that people writing “false narratives” need to be better informed. Second, he then singles out his three biggest “offenders” and the writers of such narratives from the past year and discusses, tritely, where they “went wrong.”

In order: Shay first blasts The Atlantic for saying online shopping and the rise of Amazon could be bad for retail because, to him, online retail is retail. Then Shay says that Business Insider’s claim that a large proportion of American malls and mall anchor tenants are in a tough spot is invalid because a published report by IHL claims retailers actually opened more stores than they closed in 2017. And finally, he singles out Bloomberg, saying their evaluation of retail debt levels and the potential impact of retail bankruptcies on American jobs is unwarranted because of his tangential assertion that the Bureau of Labor Statistics “only counts in-store positions as retail.”

Talk about a classic case of misdirection. You might even cite this as fake facts: deflecting attention to things that are true but, when one digs deeper, really have nothing to do with the actual points being made. It may be a great PR strategy, but just saying someone is wrong does not make a person right either.

That’s flawed logic.

Missing the Nuance

The problem with Shay’s arguments, aside from engaging in his passive-aggressive discussion on LinkedIn, is that he is missing the nuance of what people are trying to tell him – hell, even what I tried to relay in my NRF 2018 recap this past January – namely, that change is coming and that NRF, as our national organization, needs to work with the change and not against it.

Shay is right that retail is not in an apocalypse. The apocalypse metaphor has been sensationally overused. I even went on record at the recent CUE4 conference in Minneapolis, saying we are in more of a reformation than an apocalypse. Our new age consumers are playing the role of Martin Luther, nailing their collective 95 theses on the doors of our hallowed retail institutions.

While retail is healthy and thriving at the top level, there are some real structural issues hidden below the surface that our retail leaders need to address, making today’s argument an argument about leadership, not about who is right or wrong. Leadership requires seeing the nuances. In my opinion, Shay’s piece is short on nuance and long on “fake news.” As I said, this is a leadership issue.

The Unfiltered Facts

I go so far as to call Shay’s piece “fake news,” partly because the retail apocalypse has become a cliché and also because, at the end of the day, none of his points really make a difference in helping those in the industry find solace and comfort in what lies ahead. We need Shay to lead into the future.

I don’t have all the answers either. The immediate situation we face is tough. I suggest it is not going to be solved by saying who is right or wrong. We need dialogue. So, I am not going to spout statistics, cite research reports, etc. that can be used and manipulated in various directions. Instead, I am going to highlight key conceptual truths. These truths are leading indicators that alert us to the likely disruptive change, that is coming our industry’s way.

  1. E-commerce continues to steal share
  2. Stores are closing and retailers are trying to get smaller (using total store openings and closures as a mark of “health” is fallacious)
  3. Further technological innovations – namely visual search, chat bots, voice activation, augmented reality, and process automation – are already here
  4. Alibaba looms large

This is not a time to bury our heads in the sand, however tempting that may be.

Scenario play with me then for a moment. Play out these truths. What do they mean and what could be the results?

  • First, if e-commerce continues to steal share – then worse case it likely will mean fewer overall retail jobs (however, you want to classify them) and best case, it will mean jobs in different locales from where brick-and-mortar installations exist today.
  • Second, if retailers are getting smaller (even if total store counts remain neutral) chances are those stores will still employ fewer people.
  • Third, if technological innovation continues at its fast pace – then each of the above-mentioned technologies will mean less need for people and less need for storefronts.
  • Fourth, if China’s retail technology backbone is thriving – then why should retail be any different from any other industries that have gone before it? Is it not possible that retail, by way of technology, could one day migrate overseas? Future retail could indeed continue to thrive at the top line, fueled by e-commerce, but powered by a technological platform controlled and dominated by Seattle and overseas corporations, like Alibaba, too.

Future Shock

But maybe we want Shay to be right. Maybe we should just myopically believe, like the captain of the Titanic, that we are immune to disruption. Maybe we should have our heads in the sand.

Net/net, no matter how one slices it, it is hard not to envision a world where fewer people are employed in retail and where the entry-level technological qualifications for any remaining retail jobs are higher than ever before. Retail’s future may indeed still be bright, but it will not be bright for traditional retail employees.

Which begs the questions: How are we, as an industry, identifying our next generation of employees? Do our leaders have the skills to hire a new wave of retail engineers? And then, do we have a responsibility to train our displaced workers? Who are the leaders helping retailers navigate the sea of technological decision-making they need to survive in the future? And even more to the point, who is encouraging small-business ventures in the face of VC-funded long-tail irrationality? This is why we need vision and leadership.

These are the narratives that need to be welcomed and discussed from your pulpit, Mr. Shay. You may say in your piece that you have shared them already, but, candidly, your messages are not getting through. It is time to stay above the critiques, stay out of the semantics and, most importantly, to lead.

I personally challenge Shay and the entire NRF machine to address these concerns and lead the industry into the future with forward-thinking strategies and deployment of resources to make significant structural and existential changes to the industry.

Open the dialogue and encourage debate for the sake of co-creation. Paint a picture, a vision of the future that helps us all get to a better place. Tell us that you hear us and tell us everything you are doing about it. And never rest until you have paved a path to a sustainable future.

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