Retail’s Digital Frontier: Copernican Moment or Passing Fad?
In the early 16th century, Nicolaus Copernicus proposed a model of a Sun-centered universe that upended the prevailing geocentric world view. One could not be reconciled with the other. This shift in direction completely upset the accepted status quo and our understanding of planetary movements. The Earth went from being at the center of the universe to just another planet orbiting the Sun. What was once certain and familiar went out the window. The common sense and long held belief of the time was stood on its head. Might today’s digital frontier offer a similar situation in retail and consumer-facing industries? Is this a Copernican moment or is it a passing fad?
For some the digital frontier is a disruptive opportunity of the retail status quo – an Internet-powered Copernican moment. To others it’s a blip on the radar to be ignored since the nature of retail has not fundamentally changed: charge a fair price for what customers need while keeping costs down. And there’s little argument in that online retail sales have captured the lion share of growth in the retail industry these past years. Yet, with retail volume from traditional brick and mortar stores constituting the overwhelming majority of retail sales, some question the long-term significance of this digital shift. Sure, we talk of e-commerce, m-commerce, multichannel, omnichannel, and crosschannel – and it gets confusing as these are ideas and concepts based on a retailer’s or consumer product company’s view of the world and not necessarily the perspective of the consumer. Consumers’ do desire to have it all, at any time and any place, now, and on their own terms. No one really knows exactly how the future will unfold, but it’s certain to surprise.
A fundamental shift to the business model is taking place. Power has accrued to the consumer. This power is founded on advances in consumer-facing technologies (including digitization): the taken-for-granted of a ubiquitous Internet, powerful search engines, mobile maps and apps, rise of social networks, smart phones and tablets, and mobile broadband and Wi-Fi networks. As these have built on each other and have come together to deliver speed, convenience, and always-on availability to the individual, we’re now seeing a need for a model that better reflects this new reality.
As I’ve suggested in a previous blog, the future holds a hybrid retail model with physical stores and digital presence. It’s about turning the store into a brand hub designed with the shopper in mind – to anticipate and delight. It combines store associates and digital assistants, it’s not about the tyranny of “either/or” but the power of “and.” So, in reality our Copernican moment is far less about our ability to digitize everything and more about the centrality of the consumer in what we do. What is truly revolutionary is the realization that the center of the retail universe has shifted from brands and banners to the consumer. The consumer has always been at the center, but previous business models did not recognize or simply had ignored this reality, today there’s no escaping it.
A wonderful and recent example of the possibilities ahead is the My Runway Mobile App. That’s how Millennial generational shift, design, digitization, and the speed of SAP HANA come together to deliver business and consumer innovation to emerging consumer needs while presenting retailers with novel growth trajectories.
There are many challenges and opportunities ahead in retail, and these can be best understood and harnessed when we innovate with the consumer at the center of the universe.
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