“It took the digital age to teach us what we want from the real world.”
Retail futurist Howard Saunders dropped that bit of wisdom on attendees gathered at the Oracle Industry Connect conference in New York City Tuesday.
That’s part of the reason retail is in the midst of its transformational moment—while some iconic store brands will survive these growing pains and come out on the other side not much worse for wear, others may not be so lucky.
What’s more, it’s the “age of me” that’s driving much of the disruption upending retail.
Consumers have gotten all too accustomed to services, experiences and technologies that revolve around “me, me, me” and now demand that retailers deliver on a standard set by the likes of Amazon, whose nearly $23 billion 2017 R&D spending, according to Recode, dwarfs its tech peers, let alone merchants. It’s especially frustrating, said Mike Webster, senior vice president and general manager of Oracle Retail and Oracle Hospitality, during a panel discussion, that Amazon subsidizes its “lack of gross margin” in retail with the cash cow that is Amazon Web Services, which injects $4.3 billion into the company.
Still, the new norm of “digital first” is pruning some retail brands out of the Darwinian, survival-of-the-fittest necessary. New direct-to-consumer brands have “nimble” and “agile” in their DNA, greasing the wheels of their success with audiences hungry for a quality product and reimagined experiences without the traditional retail middle man—and markup. Many of the biggest retail brands with the biggest legacy investment and real estate footprints are hard pressed to compete. In some David versus Goliath matchups, the little guy will win every time.
After the era of the “art and science of retail,” this modern age with its laser focus on data often feels like all science. But the art side of things still matters.
“To be a good retailer today, you need to do more than just sell a product. You need to create a connection, bring an experience,” Webster said, adding that a number of retail customers are working to build digital profiles and personas to do just that.
So, what do consumers want from their physical retail world? Speed. Convenience. Seamlessness. Excitement. Something different, shareable, Instagram-able.
With the selfie here to stay, like it or not, today’s consumers bring new meaning to “pics or it didn’t happen.”