Retail analyst and IBM futurist Andrew Busby reports on a roundtable dinner with IBM and Retail Reflections, organised to analyse the extraordinary change occurring throughout the retail industry
We are living through the biggest period of disruption and change ever to impact the retail industry.
We hear it every week: profit warnings, CVAs and once great retail businesses going into administration. It’s Darwinism on the High Street - if you will – and it’s a stark reality for us all.
To try to make sense of it all, IBM
and Retail Reflections
hosted a retail roundtable dinner at the Gherkin in London and gathered a group of senior retailers to discuss the state of the High Street and much more.
Held shortly after NRF in New York and more recently Retail Week Live in London, there was plenty to discuss but emerging from the evening were three stand out trends to analyse: Artificial Intelligence; the role of the store and frictionless commerce.
Artificial Intelligence (AI) is perhaps the biggest and most significant change the retail industry has seen for decades and there was plenty of discussion around just what AI is and what AI isn’t. The consensus was that if you haven’t begun your AI journey yet, you’ll never be able to catch up.
It also seemed natural to discuss the role of the store as there is a certain amount of irony in the fact that online continues to grab all the headlines and yet only accounts for around 15-17% of sales (depending on which part of the world you live in).
The store is rapidly evolving from a place to keep the stock dry to the new battleground of retail where the experience is everything.
And in this context, the ways in which physical can be merged with digital was the focus of much discussion and the general agreement was that those who are able to a) use an appropriate blend of technologies and b) create a seamless physical / digital in-store environment are those more likely to succeed.
This brought us to the third trend of frictionless commerce. While it’s long been known that the shopping journey needs to be easy and convenient, this is being felt more than ever now in an age where if your website takes more than a few seconds to load, you’ve lost that customer.
Less tolerant, impatient, more demanding than ever before; the margins for error are at best slim if you are to attract and retain today’s tech savvy consumer.
The evening concluded with a look to the future at what trends we might look back on this time next year as the key areas of 2018.
As expected, AI featured; it is pervasive in pretty much everything. Blockchain was another technology raised, beware estate agents your days could be numbered; maybe a reinvention is required?
Ease of checkout echoed the frictionless discussion and it is clear that the entire checkout / payment process will in the future be transformed.
There is also clearly a shift in the ways that consumers wish to interact and while technology must be kept in its rightful place – unobtrusive, enabling rather than confusing – the right mix of technology is key to addressing shortcomings and failures.
Final mile fulfilment was another topic discussed as now, more important than ever before, a brand’s ability to deliver whenever, wherever will largely come to define it - supply chain flexibility enabled by inventory visibility is now vital for any retailer.
In conclusion, there is no question that the sheer pace of change and innovation can at times be bewildering and those retailers still clinging to the belief that past working practices will continue to work can expect a nasty shock just around the corner.
It’s sometimes difficult to appreciate that what we are experiencing in 2018 is not just another trend but that we are living through a seismic revolution in retail.
Old irrelevant ways no longer work and it’s time to throw away the rule book - retail is dead, long live retail.