​The 2017 holiday season is shaping up to possibly be a real winner for retail in North America.  Consider the much-improved economic climate, stellar stock market performance, low unemployment, and favorable consumer confidence sets a pretty good stage. The battle-lines of where and how the consumer will choose to make holiday purchases is most intriguing. I believe this holiday season will begin to etch a meaningful shift in what retail will look like for years to come.
 
2017 Holiday Expectations
     Predictions, expectations and estimates are all to the upside vs. last year according to numerous organizations that track this information. 
     Generally, there is a consensus that holiday sales (excluding travel and event purchases) will increase in the range of 3.6 to 4.5%.  That is particularly good news, as the last couple of year’s growth has been quite dismal.
     That is the broad swath of retail market predications.  And that should bode well for all.  A rising tide lifts all boats, as the saying goes.
    Not surprising, growth in e-commerce retail sales for the coming holiday season are estimated to be somewhere between 11 and 21% (2016 online sales grew roughly 14% over prior year).  I am in the camp of closer to the 20% growth for 2017. 
     Where there is momentum, there is growth.
 
The e-Play of e-Commerce
     The digital era is in full swing and promises to only gain in momentum.  Amazon is certainly the bell-weather for online shopping and the e-commerce segment in retail.  It will be the focus of the overall direction of e-commerce as we step into the holiday season.
     Consider some of the market analysis published by Fung Global Retail and Technology –

• 83% of holiday shoppers will buy something from Amazon
• 77% will shop brick and mortar retailers

    In other research, it is projected that 75% of all holiday shoppers will purchase from Amazon. That is powerful.  It gets better – 9 out of 10 Amazon Prime members will purchase from Amazon over this holiday season.  The power and leverage of the Amazon loyalty program is second to none!  For holiday 2017, considering the online market growth, Amazon will easily add an incremental $5 billion in sales this year.
     At the root, convenience and ease remain the two most significant advantages of e-commerce shopping.  The advancements in smartphones, wearables and other wireless technology will keep us constantly connected.  That brings the essence of convenience and ease within a fingers touch.  In fact; 40% of holiday purchases this year will be made on mobile apps.  That is nearly double from 2016.  The next evolution (and coming quickly) will be the technology of the truly “connected” Smart Home, that will go beyond the Google Home, Apple HomePod and Amazon’s Echo devices we know today.
 
Brick and Mortar Retail Play
     It is important to keep in mind; the e-commerce segment includes the online sales of traditional brick-and-mortar retailers too.  There are exciting initiatives underway. 
     There are many very well managed retailers, and although playing catch-up, great strides are being made for developing the integration of online into their operational platform. 
     The baseline advantages for traditional retailers are quite clear.

1. The Now Factor.  The truth is (and has been aided by technology), we are a consumer society of wanting it now.  Retail provides that option.  Buy it now, use it now.
2. The Personal Experience.  This is the single most relative and richest advantage for traditional retail. . . today.  The ability to touch product, evaluate alterative options in style, functionality, price, brand and many other influencers.  Not to be overlooked, the fulfillment of today’s demanding consumer to have it “now” is a powerful advantage. I am convinced that those of us supplying product and services to retailers can have a huge influence on the experience.

     Although not being leveraged with significance today, the personal experience is being redefined and requires brick and mortar retailers must move beyond just price, assortment, and merchandising.
     I am excited for what will come from the traditional retail sector for true deployment of an integrated, omni-channel build out.  The power of what a seamless consumer purchasing platform of the physical store and online experience.  The true merging of the personal touch, convenience and ease.  Here are just a few things that will shape the next advances in retail as we know it.

• Video – it is all about the message and done properly, the manufacturer can (and is best suited to do so) deliver what that message.  The power of visual and audio is a powerful marketing tool.  This is low hanging fruit and more is needed.
• Artificial Intelligence – the possibilities of what AI will do is incredible.  The advantages of how it will shape how we purchase, shop, and anticipation of our needs is mind-blowing.
• Algorithms - not suggesting a “Big Brother” theory, but it is utilization of big data is a game-changer.  Consider the power of harnessing the data from our internet searches, browsing of goods and services, those we “follow”, the “likes”, and of course purchase intent / history.

     There are great things happening and taking shape today for the evolution of retail.  This will be exciting.  The advantage for the supplier community is how we can provide and deliver that value that will be a competitive advantage in our respective categories.

            Some strange things have happened since Amazon announced the acquisition of Whole Foods in June.  In my opinion, it opened the idea that Amazon will rule the retail world.  Initially, grocers took the market valuation hit, but soon spread to other retail segments.
            Really?  Is the traditional retail fear of Amazon really warranted?  I believe the answer is both MAYBE and MAYBE NOT. 

MAYBE:

• Tough Year for Traditional Retailers:  2017 has produced some alarming stats.  Numerous store closings, new store openings at the lowest rate in nearly a decade, and bankruptcies seem to capture the headlines on a weekly basis.
• The Strong Survive:  there is a long list of retail bankruptcies:  Payless Shoe Source, Aerosoles, Rue21, Perfumania, HH Gregg, Gander Mountain and most recently Toys ‘R’ Us. . . just to name a few.  Some have closed their doors forever.  Others are on the brink of “filing”.

     I contend those retailers that are dying have failed to have a solid vision of the future to their customer’s expectation.  Other retail venues have stepped in and filled that void.  In some cases, poor financial maneuvers to put the business in a perilous situation.
     The retail landscape has, is changing, and will continue to change.  And it should be changing.  From a macro view; The Home Depot was the game-changer in the hardware / building materials segment, Walmart redefined mass retail, Best Buy created the mecca for the consumer electronics experience, and Costco created the retail membership venue.  And without a doubt, Amazon is bringing a new dynamic force to retail.
 
Is Amazon the reason for the reshuffling of the retail environment?  Not entirely.  Keep in mind Amazon is only 5% of retail sales (that is excluding food products).  Has Amazon created or filled a void to meet consumer shifts in buying habits?  Certainly yes.  At the same time, there are numerous brick & mortar retailers making a big impact on meeting consumer demand through emerging and developing meaningful, high impact strategies.
 
 
MAYBE NOT
     With approximately 70% of the United States GDP being consumer driven and retail being a significant part of that number, brick and mortar retail will survive and thrive.  But will rely on the strong and nimble retailer.
    I personally believe this is a “golden age” for retail and those of us marketing consumer goods.  For the record, this is not a suggestion to shun digital or web-based retail.  In fact; just the opposite - it will grow and is / will be a formable platform connecting with the end-user of our goods and services.  This is a simple, straight-forward way that we should be supporting brick and mortar retail.

1. If you are not thinking Omni-Channel, You’re Not Thinking – a go-to-market strategy has got to think about the engagement of how the purchaser could interact with the product and the ultimate buying decision.  In-store, social media, or web.  This has become hugely important in our mobile world.
   • Brick and Mortar retail has an advantage for the most rounded personal experience.  The ability to touch product, compare most popular alternatives, logical add-on to product that might otherwise not have been considered.  Powerful and fundamental to buying experience.  The personal experience has not been fully replicated with the online retailer.  The ever-increasing use of video will be a big advantage for the online retail world.

      Seeing this as “the advantage” for brick and mortar will fail.  The competition is simply too fierce.  A woven strategy with digital marketing venues does create a strong platform.

1. Mandate to Think Differently – the merchant with progressive retailers is totally open to new ideas on how to reach the end-user’s purse.  A well-conceived and solid plan is required.  This requires thought, preparation, strategy and ultimately results (top line sales, gross margin, solid supply chain to serve the business demands).
2. Innovate – there is nothing more exciting that new products that improve the user experience.  Those marketing to retail must have a solid plan to bring change to their respective product lines.  Failure to do so, opens the doors to competitors…. And they will come.

 
In conclusion, traditional retail is not dead.  In fact; very much alive and the opportunity to leverage products and services has never been greater.  Retailers do not have all the product & merchandising answers.  They look to seasoned, mindful, experienced marketers to bring solutions to complex challenges.  The ultimate WIN-WIN outcome is at hand.

David Kearsley
Business leader and continuous learner in consumer durable products sold through various partner channels; retail, capital goods, infrastructure product lines.
   Recent life relocation to Denver, CO.  Seeking senior leadership role with a company to champion growth and innovation for creating sustainable enterprise value.   My Website  |  My Blog