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The 'retail apocalypse' is a myth

Mike Elgan | Oct. 23, 2017
Online shopping is killing brick-and-mortar retail, right? Wrong! The reality is better than you think.

 

Boring vs. innovative

What happened was that consumers are getting bored with uninspiring malls at the same time major department stores are being displaced by more innovative retailers. The result: malls are seeing anchor store closures at an accelerating pace.

What's happening is that innovative malls are getting more popular, and non-innovative ones are getting less popular. The divide between bad malls and great malls is getting wider.

The innovative malls and retailers are learning from the e-commerce companies, and embracing data-driven retailing, personalization, apps and unique experiences.

What's happening above all is that retailers embracing omnichannel retailing are tending to find the most success.

Omnichannel retailing is the convergence of online and offline buying, where there is no pricing advantage in any channel. Instead, consumers are presented with options for buying online, in-store or a combination - order online and pickup in store (or order in store and have it delivered).

Retailers embracing omnichannel retailing, stores like H&M and Forever 21, are growing fast.

Wal-Mart's head of U.S. e-commerce, Marc Lore, reportedly said that "Online retail is simply intended to make us better merchants."

The bottom line is that there is no "retail apocalypse." That's based on an obsolete dichotomy between "online" and "physical" retail. The real division is between data-driven, app-centric, flexible and omnichannel retailing on the one hand, and old and stale retailing on the other.

What's emerging is a new understanding of how to sell goods and services to consumers. They want online. They want brick-and-mortar locations. They want choice. They want experiences. They want personalization.

And the companies that are delivering all that are taking over.

The result is that online stores are gaining physical retail options. And brick-and-mortar retail is getting a lot more exciting, interesting and enjoyable.

 

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