Over 5000 retail stores were closed in 2017 and continuing apace in 2018. It’s too simple to blame these closures solely on the rapidly growing ecommerce marketplace, with Amazon leading the pack. For sure the pure online players are stealing a lot of business from the traditional brick and mortar retail sector. However, once these legacy retailers build their own online business, they will gain back a big share of those fleeing dollars. But, there’s another more ominous existential threat: the new consumer mindset.
The millennial and Gen Z cohorts are now the largest consumer groups, replacing the retiring boomers. Having grown up with mobile devices stuck to their heads, and with an entirely different set of values and lifestyle desires than their parents, they have flipped traditional shopping behavior on its head. Not only are they more interested in the style of life and experiences than the stuff of life, they also expect personalized products and services, authenticity and sustainability.
Furthermore, they can scan more products and services in ten minutes on their mobile devices than they can spending an entire day at the mall or shopping for hours in a building full of stuff, aka, a traditional retail store. So, why even go to a store anymore?
That, folks, is the existential threat.
Therefore, while the legacy sector must race to build its online model, it must simultaneously transform their buildings full of stuff to buildings that are destinations as social gathering places, like communities, full of personalized experiences, entertainment, interactive services, restaurants and food courts, and all constantly changing and evolving to compel customers’ loyalty and more frequent visits.
Let’s face the facts:
- The biggest threat to traditional brick and mortar retailing is also its greatest opportunity, and that is the newly dominant young consumer base.
- The roughly 1200 regional malls are under the same threat and yet, have the same opportunity as the physical stores that reside in them.
- Small neighborhood shops and boutiques, as stand-alone or as part of a regional or national chain, have a great advantage over the giant traditional “big box” or department stores.
- For the traditional “big box” or department store retailers to survive it’s going to require a visionary radical leader at the very top and radical thinkers and innovative “doers” throughout the organization to radically transform their old models into compelling “must-go-to” destinations for the new, young consumer base.
- The most neurological addictive experiences are those that are co-created by both a proactive customer and the retailer, interacting in a mutually created experience.
- Pure e-commerce players like Amazon do not have the ability to create the physically experiential, entertaining and personalized social gathering places, that the brick and mortar retailers do. So, they must decide to either build or acquire physical stores or determine that their digital model is good enough as is.
- For the traditional big box and department stores, understanding the necessity to create compelling experiential “go-to-and-hangout” places, and the need for radically thinking and doing leadership to get it done, is priority number one. However, “speed” is the operative term, because the new young consumer base is not going to wait. There are simply hundreds of other, more compelling options.
Join Our Radicals Awards
Help us find the right reasons to shop in a store. We are looking for traditional legacy brick-and-mortar retail innovators (in organizations established prior to the year 2000) and brand change agents who consider themselves radicals in their companies.
The Awards will recognize the change agents who work in every sector of retail and brands from management and human capital to the back-end supply chain, strategy, merchandising, stores, marketing, analytics finance and any other aspect of the business. These are the radicals that are rethinking and reconfiguring traditional retail and major brands.
We will identify 10 finalists who are changing their organizations and reveal the Grand Prize Winner in March 2019 at our awards gala at Shoptalk. The deadline for applications is December 23, 2018. Nominate yourself or a colleague today! The finalists will be reviewed by a prestigious jury of retail leaders and featured in The Robin Report. It’s a valuable way to share best practices and success stories that will raise the bar of the entire industry.
Why did we establish the Radicals Awards? We have observed that there are thousands of conferences celebrating the tsunami of tech-driven upstarts. So, we asked ourselves, what about the unspoken, un-recognized, unheard of radical thinkers and doers and bold innovators within the traditional retail sectors who have a far more complex job of turning those battleships into speedboats to strategically and structurally move them quickly and successfully into the new world?
So, we urge you to support the mission and encourage members of your team – and yourself — to apply for the Radicals Awards. Together, we will lift the receding tide of retail and inspire the industry to think like new-world entrepreneurs and innovators.
Upcoming Radicals Events
We have a series of interesting and inspiring programs with industry Radicals that will inspire your own retail radicalism.
Listen to a replay of our Radicals podcast “Why Go to a Store Anymore?” that was recorded July 11th to hear from Robin Lewis; Paul Charron, former CEO Liz Claiborne; and Retail Industry Value Engineer, SAP; Rick Barber.
Listen to our recent Radicals podcast, “Surviving in a Radically Changing Industry” with Robin Lewis, Shea Jensen, Senior Vice President, Customer Experience, Nordstrom and Matt Laukaitis, Senior Vice President and General Manager, SAP