On the eve of a golden retail era, 'retail prophet' Doug Stephens feels the "age of big box stores were basically the Middle Ages of retail, but today we are in the most inspired period of retail ever".
Your book is entitled ‘The retail revival’. However, given the increasing number of retail companies going out of business and slimming down, it seems more like the ‘fall of retail’ right now? How and when will the industry ‘revive’?
D.S.: "It is reviving as we speak, but with a different cast of characters. Many of the old, established “empire” model retailers are giving way to new-age, networked retailers like Etsy, Warby Parker, and others.
Everything we thought we knew about retail is up for grabs. We have moved from the industrial era of retail, which was all about capital, scale and control to a new era based on digital connection, networking and shared interests. Therefore, the old “rules” of retail are no longer valid as they are now being rewritten by a new generation of retailers."
What are some of the most remarkable trends you see emerging in 2015?
D.S.: I think the digitization of the physical store environment is one of the most exciting frontiers we are embarking on. The notion that stores can become like living websites, offering consumers more rich information and experiences and retailers more in-the-moment data are very compelling ideas.
Faster, cheaper and more convenient shipping is the new moon race. The challenge for Amazon, Alibaba and Ebay is no longer getting us to buy. We’re doing that. The challenge is getting what we’re buying to us as quickly as possible. Consumer expectations around delivery costs and times are increasing."
They say retail is evolving towards a service industry. Do you agree?
D.S.: I believe it’s evolving to become an experience industry. I believe there will ultimately be two kinds of stores: massive online marketplaces that sell millions of products and experience-focused, specialty retailers that offer an immersive experience within a category of goods.
You will not be able to achieve that by paying low wages and offering poor working conditions. There is certainly a way to have committed sales assistants, but not like this. Retailers will have to either completely replace sales staff with technology and let customers serve themselves, or introduce technology that can support the work of higher skilled individuals who can bring personality, engagement and mastery to their jobs.
The middle-ground where staff in-store simply act like robots will collapse. Many will be replaced by robots, even in the not-so-distant future. A study by Oxford University estimated that there is a 92% likelihood of retail sales workers being replaced by technology in the next 10 years.
You say that retail will revolve around experiences. What people buy and take home will still, in the end, be a product. Doesn't that mean it still has to be a product-oriented business?
D.S.: Nobody really values the things you sell anymore, what matters is how you do it and why. Differentiating on product was more possible before globalization and digitization. Now, having a product that is truly exclusive or unique is very difficult. Everyone can reverse engineer everyone else's products.
However, the belief system of the brand, coupled with the unique experience you place around selling your products, creates an alchemy that is more difficult for brands to replicate. This has been Apple’s secret to success; a great product, coupled with a differentiated corporate philosophy and underpinned by a unique customer experience."
You say innovation makes companies feel uncomfortable. Would you care to elaborate?
D.S.: "Innovation is implicitly uncomfortable because it is new. If something isn’t new, it is not really innovative. So, if a company really wants innovation, then it needs to manage the discomfort of these new and radical ideas.
To provide some solace: we are entering the golden age of retail. The era of the big box was, in my opinion, the Dark Ages. We are living in the most inspired period in retail history right now!"
Doug Stephens will unravel his vision for the future of retail at the RetailDetail Congress on 23 April in Schelle. To join the Congress, quickly subscribe on our website!