So here we are, less than a couple of years after the peak of lockdown. Less than a couple of years after the stella rise of ecommerce market share, and the adoption of every app and touchpoint available to engage with digital retail and diverse home delivery services.
So, here we now are, with some of the biggest names in pureplay retail suffering, losing sales and profits eroding, scrambling to maintain any kind of customer loyalty and retention. Everyone from Amazon and Zalando, to ASOS and Boohoo are struggling to make sense of their retail models.
However, this is not a battle of channels. The best pure plays will survive and flourish again. The unfit physical retailers will become casualties of the next few difficult years.
The winners, as always, will be those that are good at retailing. The losers will be those who make the familiar mistake of ‘dumbing down retail to distribution domination.’
In retailing’s first era of exploitation, beginning with the US mega stores of the 1950s, ‘successful’ retailers relied on their buying power and aggressive negotiating to bring whatever product they could to the market. They sold relentlessly through rapidly expanding shop estates. They were on every high street, in every mall. This worked spectacularly in product hungry, demand driven markets. Physical accessibility won.
But later, as supply outstripped demand, when it came to actually producing products and delivering services that the customer wanted, and preferred, then these ‘distributors’ had no recourse, no plan B. They were unable to shift from their one-dimensional, initial margin, mind-sets, and processes.
And now we see the same story as ever, but with a digital twist. ‘Successful’ pureplay retailers who have been dumbing down on retail, confusing retailing expertise with the domination of distribution, visibility, and accessibility touchpoints.
Sadly, for them, customers do not actually buy SEO rankings, or wear millions of Facebook likes. Nor do they buy over-hyped, un-attractive products, or wear, unwearable garments delivered like rags in cocoons of plastic.
This is not the death of pureplay, or physical, or any retail channel. It is the demise of poor retailers and their naïve angel investors, who only ever see retail as the domination of distribution channels.
And for those still in denial, being good at retail involves building commercial and attractive assortments, delivering excellent customer service and services, evolving efficient supply chains, and distributing to wherever, and whenever, the customer wants you to engage with them.
It is once again, their market.