To survive or not to survive – that is the retail question
Retail has traditionally been one of the fastest-changing industries and the rapid shift towards online shopping, with the emergence of new consumer habits and preferences, has forced retailers to review and adapt their operations in a very short time.
In 2020, according to Statista and based on data from the US Census Bureau, online sales in the US reached 14 per cent of total retail sales, or $792 billion in value. In 2015, that figure was just 7.3 per cent, showing how rapidly online has accelerated in recent years and in 2020 in particular.
The traditional resistance of many retailers to change and innovation has been put in second place, as they realize they face an entirely new situation that has put the survival of their businesses at risk.
Change and innovate
Among these changes is the need to embrace omnichannel retail, which is now more urgent than ever. Physical stores face new scenarios that force them to acquire new omnichannel capabilities. Perhaps the most important challenge is the obligation to develop a totally new role for their stores as logistics centers for order preparation.
Businesses also need to offer new shopping experiences, at a time when both the number of store visits and the dwell time — the time buyers spend in stores — has fallen.
All these changes are taking place in an increasingly complex technological environment, with the emergence and incorporation of a greater number of innovations. While offering additional benefits and options for retailers, new technologies increase the complexity of their systems map daily.
Faced with this situation, retailers are forced to replace legacy systems and adopt new technological solutions, which must not only offer broad support for a variety of omnichannel scenarios already proven by other retailers in the market, but also – and critically – offer a level of flexibility not seen to date.
This will allow rapid evolution and adaptation in the future, with new processes, payment methods and channels, thus supporting the concept of business resilience, which has been widely used in recent months.
Your existing legacy systems won’t respond well to these needs. In this situation, there is only one real choice. To paraphrase William Shakespeare, to survive or not to survive, that is the question.
It is no accident that those retailers that recognized early on the need to embrace omnichannel retail have shown the best results during the pandemic, and many retailers whose results have disappointed are in the process of transformation. But those that have done neither face a real risk of disappearing.
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(This is an abridged version of an article originally published by Business Reporter on July 7 2021. You can read the complete article here, included in the Future of Retail special edition.)
