All retail businesses, regardless of their format, must navigate the disruptions of digital medium. This is how that can be done...
The retail industry has come a long way since the neighborhood mom-and-pop stores. History has shown it to be one of the most disrupted industries, and this trend is only going to continue, albeit at a much faster pace, because of digital disruption.
Unlike other industries, however, retail can never be completely digitized and virtual. Ultimately, retail is about the transfer of physical goods to the consumer. You cannot digitize the clothes people wear or the food they eat. Therefore, it is an interesting space to observe as no single retail business has an absolute advantage over the other. Brick-and-mortar businesses have the advantage of retail expertise. Digital-born organizations have the advantage of technological prowess. A combination of the two is still rare.
Therefore, all retail businesses, regardless of their format, must navigate the disruptions of boundary-less organizations, limitless digitization, unbounded innovation, and relentless iteration. Let’s look at examples of how these disruptions are shaping modern retail:
Digital-born organizations such as Amazon do not box themselves into traditional industry boundaries. Amazon, which started as an online book retailer, competes today with Walmart on retail, Google, and Microsoft on cloud computing and the likes of NBC and BBC through their original streaming content.
This may not seem like a new phenomenon as conglomerates have been operating in diverse businesses for decades. The difference today is that the core value proposition is offered from a unified digital business platform.
Digitization has resulted in the conception of ‘Figital’ retail businesses – the blending of virtual elements into the physical retail experience:
Digitization strongly supports retailers to think outside the box about their offerings. Therefore, the retail industry has become highly innovative, venturing into arenas never fathomed and creating practical outputs for consumer convenience:
The competition in the retail space is so high that retailers must constantly come up with something new and different to attract and retain customers. Customers are either looking for a better price point, continued novelty, or better value. This explains why e-commerce platforms like Myntra, Amazon, and Flipkart have gimmicks like lightening deal, end of reason sale, etc.
To be able to do this, retailers need to constantly engage in market research to learn about their consumer’s habits and desires. This is essential since consumer behavior is constantly changing. Social media and the internet allow consumers to be better-informed while also easily swayed.
Ultimately, the retail industry is not going anywhere. Consumer behavior patterns will continue to change, but there will forever be a market for retail, even if it is borne out of necessity. What retailers need to understand, irrespective of whether they are incumbents or digital-born organizations is that they will need to constantly reinvent themselves to retain their customers, who, today, are incredibly flaky.
This article is written by Rajiv Jayaraman, Founder-CEO of KNOLSKAPE, TEDx speaker & Chief People Officer.
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