So the winner yet again this Christmas was online retail.
Also, apparently and a little contradictory, Amazon was at the same time killing off retail itself, which is a little strange considering that the last time I logged on to Amazon, it was indeed a retailer.
It all makes for good headlines, even if becoming a little stale and increasingly confusing, however beyond being pedantic about headlines, retail is far from dead, physical stores are still hugely popular and Amazon itself opened only last week its first open-to-the-public physical store. Now that’s that all cleared up.
Of course what we are witnessing is a huge change in retailing, in the way that we shop and the way that we buy – too slow for a revolution if you’re a millennial or younger but decidedly too fast for just mere evolution if you remember, or even worse were involved in, those halcyon days of 20th century retailing.
Of course all walks of our physical and online journeys through life are changing at break neck speed from the way we eat, drink, travel, holiday to the ways we pay tax and meet our friends and partners for life, however long that may be.
Retail, allegedly the second oldest profession, and day by day the newest profession for many, is of course always riding the crest of the tidal wave that is time. So here we are at last.
Firstly in terms of pure figures. Yes when it comes to sales trends, online retail does have the fastest growth and certainly higher than that of physical stores, however in terms of actual retail sales, online is still far behind its bricks & mortar counterpart. In deed the incredible growth in online sales is in fact slowing with predictions for growth this year less than 10 percent for the first time.
This percentage of online sales and sales value of course varies a lot by product category however the general consensus is that there is a limit to the level of online sales achievable and that limit for most categories will be well below the retail sales from physical stores. The reasoning behind this is simply human beings, another contradiction in terms, and that sizeable proportion of them who are shoppers. Human beings as a whole still love the physical store experience.
And beyond this and almost inconceivable a few years ago, Millennials and Generation Zs weaned on the internet, are falling in love with the physical retail experience for the first time, against all the odds. There’s also plenty of evidence that with the correct physical environments, product engagement and service interaction, that the older generations jaded by decades of foot-soldier shopping, are discovering physical stores for the second time and are very much capable of falling in love with shopping all over again.
Of course this “rose-coloured” view of today’s reality requires physical shops to be very different from the sales channels of recent decades. And for sure there will be fewer stores certainly from the multiple chains as over 20 percent of our shopping does go online, but potentially more physical stores from retailers originating from online and for new, smaller passionate and competent independents offering something interesting and individual to local and regional shoppers.
In deed in our irreversible omnichannel world, it’s highly likely that in a decade or so the origins of individual retail businesses will become blurred and inconsequential. We will no longer segment them cosily by physical or pureplay because by then all successful leading retailers will be, as it is almost the case now – omnichannel. All retailers will be balancing the attraction of the physical with the convenience of online and the engagement of social. Channels supporting and complementing each other for the greater retailer and consumer good.
And so at last we can then return to assessing individual retailers by their performance and attributes rather than their roots and origins. We can talk, as we should be doing now, about the winner, or loser, being retail itself and not simply one of its component channels.
Retail is already omnichannel – unequivocally. The customer journey is being played out across the touchpoints of customer experiences of both physical and technological channels and platforms.
The question is not “if” to become omnichannel. It is “how” to excel at omnichannel.
And therein lays the real question of Christmas.