Retail in the Next Five Years, A Review from 2012
Back in 2011, I was Director of Sales and Business Development (including retail), which morphed into a Director of Retail position for the World's Largest Bicycle Brand, a $2bn brand. The branded store model was growing rampantly in the cycling space and we were falling behind, so I was asked to travel the world and write a white paper on the future of retail in the next five years (2012-2017).
After working with some key associates in some of the world's biggest and best retailers in my network, I was confident that I had nailed the 6 Key Success Factors for retail, but after presenting them, outlined below, I was heavily criticized by the Global President and the U.S. General Manager that it was "pie in the sky" and "wasn't grounded in reality."
I wasn't ready to take the loss on it, but it was one of many "trigger moments" in my relationship with my manager and the mentoring I was receiving from the Global President, eventually leading to my departure from the company. One of the most important management and leadership lessons I learned from my time at Gallup was "employees leave managers, not companies."
Fast-forwarding to this week when I got a notice from Dropbox that my account was being deleted because I hadn't used it in a while, even though I still had a paid account that I was using. Anyway, when I reauthorized it, I saw the White Paper that I had written and ultimately presented my findings of "Retail in the Next Five Years" that day in October 2012. I was curious to open and see if the projections that I came up with 8 or 9 years ago came true.
For reference, the Iphone 4s had just launched!
What do you think? Was I way off, spot-on, or somewhere in the middle? Feel free to comment!
Retail in the Next Five Years (Unedited)
Similar to the cycling industry breaking out into sports-specific retailing, some of the U.S.’s largest sporting goods retailers are also establishing sports-specific retail stores. For instance, Dick’s sporting goods, with over 900 stores, has started to branch out into women’s only retail, running-specific outlets (True Runner) and there is a cycling-specific retail model being planned. Finishline (www.finishline.com), often seen as the most progressive sports specialty retailer with over 300 active lifestyle sneaker stores has also adopted a clothing-only store and a running-specific retail model (www.run.com). In fact, on November 21, 2012, they announced that they are re-launching finishline.com “as part of its push to improve its reach as an omnichannel retailer.”
Target, the U.S.’s second-largest consumer retailer has also launched an active apparel store in San Francisco this year. Other retailers like Best Buy are opening mobile specific stores, and active concepts selling e-bikes and other cycling specific equipment like heart rate monitors and bike computers.
What is also becoming very popular in the retail environment are “pop up stores”, “green concepts” and “ethnic-centric retail.” Pop up stores “are temporary retail spaces that spring up in disused premises or purpose-built venues, before disappearing—often without warning.”
Brands from Target, Chanel, Nike, Ebay, Tesco, and other niche brands open these pop-up shops as a quick way to get distribution in high traffic areas that have been affected by the downturn in commercial leasing. It’s about raising brand awareness in a low-rent, short term lease (often 30-90 days).
We are also starting to see the online retailers opening physical store locations to create that omnichannel experience. Online retailers like Ebay and Amazon have all opened new retail concepts within the last two years and they are expanding rapidly. The race is on to blur the lines of online and physical store retailing.
Within cycling retail, services like Giant’s Click and Collect and Smart e-tailing have been launched as a way to meet consumers' expectations of ordering online and picking up the item in-store, paving the way for an omnichannel retail experience. Within the next five years, as the consumer becomes more accepting of shopping online and picking up items in-store, the challenge becomes “how do we keep the consumer coming to the physical store and coming back to the online store?”
Over the next five years, experts expect 42% of all retail sales will come from online and mobile, the online store (the mobile site) will be the first stop as consumer’s research and purchase product. Therefore, the seamless integration of brand messaging starting at the mobile site, into the full site, then into the physical store will be the key to brand growth and retail sales growth.
My research has shown that there will be 6 key success factors in creating a successful omnichannel retailing experience:
- Developing a more engaging in-store experience.
- All transactions will be completed via mobile POS, or on shoppers mobile devices.
- Sales will come from online, mobile, and commercial sites
- Coupons will be sent based on consumer location or proximity to the store
- Provide personalized product details to shoppers smartphones based on previous behavior.
- Retail stores will be the hubs of activities and information.
What do you think? Did I die on my sword?
