Is retail really seeing a new normal?


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One of the most important narratives in retail for 2019 is retail’s “new normal,” a deeply disruptive environment that calls for big changes to cater to the wants and needs of a new audience. Retailers need to move and adapt faster than they have ever done before. They need a broader understanding of their customer base, and they have the data and the analytics technology to have it. Most importantly, retailers need to understand that “new normal” doesn’t just mean e-commerce.

While having a strong and vibrant online presence must be a big part of any retailer’s sales, new normal also means adapting the in-store experience as well. This includes innovations like smart shelves, which are already being deployed in some grocery chains. Not only can smart shelves allow grocery managers to digitally change the display, they can also recognize shoppers as they pass by, and recommend products based on their shopping list or buying preferences.

The biggest innovation in in-store retail over the next few years will be grab-and-go cashierless shopping, first introduced by Amazon Go. The revolutionary concept has caught on quickly, and other companies like AiFi have joined the movement with fully-automated NanoStores. AiFi’s NanoStore was displayed at the National Retail Federation conference at the Javits Center in January. The company announced recently that it would be working with Żabka, a small-format convenience store chain with 5,200 sales points in Poland, and one which is adapting well to the new normal. According to Żabka’s VP for Finance and Development Tomasz Blicharski, “The solutions we create are designed to adapt us to customer expectations by offering them the most advanced, convenient and fastest shopping experience on the market.” According to Blicharski, AiFi’s technology will be used to deliver faster service to customers in traditional stores, as well as to develop a fully-automated store format.

Is the new normal really new?

Is retail’s new normal really new? Not as much as we might think. There are certainly new business models and new customer demands, older retailers failing and newer retailers taking their place. This is however, the very nature of retail, and adapting to the times has been the foundation of retail’s success for the past hundred years. Sears, despite its failure in the modern world of ecommerce, was actually one of the very first retailers to give customers an alternative to brick-and-mortar shopping, in the early part of the 20th century and long before there was such a thing as online shopping. The company was a pioneer of catalog sales – an innovation that lasted for decades and contributed to their 20th century success.

Adapting to retail’s new normal goes way beyond ecommerce. There are two fronts to retail’s new normal: The unrelenting move to ecommerce, and the digitization of the in-store experience. New normal isn’t about online shopping replacing brick-and-mortar, it’s about how the two can co-exist. In a Deloitte report titled “The retail transformation,” the authors noted that consumers don’t care about whether they are shopping online or at a physical store, what they care about is getting the best deal regardless of how they reach that goal. “From the viewpoint of a typical consumer,” says the report, “a retailer should offer a seamless shopping experience across online and offline channels, integrating its virtual and physical operations” – concluding that the distinction between online and offline shopping is increasingly blurred, “if not entirely irrelevant.”

Making way for the new

It would seem to be common sense that larger, well-established retailers would be better positioned to weather the impending changes, simply because they have more resources – but this has proven to not be the case. Larger retailers are falling by the wayside. Sears narrowly survived after its bankruptcy, but its future survival is in doubt. Toys ‘R’ Us has fallen, largely because it relied too heavily on bricks and mortar. Teen accessories retailer Claire’s filed for bankruptcy protection last year after a private equity firm took it private.

We may also be seeing a resurgence of smaller retailers and startups as these large retailers continue to fall by the wayside. Smaller-format stores like Amazon Go and Żabka’s AiFi-powered storefronts are still in the early stages, but consumers are clearly interested in brick-and-mortar stores that can provide a personalized experience with all the advantages of modern technology. Small-format shops and other innovations like pop-ups will play a big role in retail in the coming years, and more entrepreneurial startups will need to pay close attention to these technological innovations. Those smaller retail startups’ first decision won’t be where to locate their physical shop, but rather, where to find the best web hosting for a small business, how to gather data and use it to their advantage, and how to deliver a seamless in-store experience that combines technological innovation with small-store personalization.

Dan Blacharski
Ugly Dog Media
Dan Blacharski is a thought leader, advisor and industry observer. He has been widely published on subjects relating to customer-facing technology, automation, and Industry 4.0. He lives in South Bend, Indiana, with his wife Charoenkwan, a noted Thai author and journalist, and their dog "Ling Ba."


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