This article is part of Raydiant’s new Future of Retail series which interviews the world’s leading retail experts to better understand how the industry has evolved and most importantly, where it’s headed.
The following is from a recent interview with Forrester VP Principal Analyst, Sucharita Kodali.
What personally excites you the most about the retail industry?
SK: I think retailers are overcoming their victim complex, that every tech company is the reason for their decline versus realizing that better execution, listening to customers, partnering better with brands and recognizing the value of their existing assets are the way through dark times. Brands and retailers have far more assets—data, consumer trust, access to merchandise—than they realize.
What has been the most dramatic change you’ve seen in the industry over the past 3-5 years?
SK: The explosion of Amazon’s numbers.
We’ve never seen anything like it and probably never again will in retail. It hasn’t been the result of a single thing but dozens of things all well-executed together. It has blinded retailers and brands and has led them to make irrational and often foolish decisions like investing in same day home delivery or selling on the Amazon marketplace.The latter is selling a competitor all your proprietary transaction data for a few million dollars.
What are the top trends you see shaping brick and mortar retail in the next 3-5 years?
SK: Econtrol which is governance around brand distribution. It will be as transformative to retail as when the record industry went after mp3s. We’ll also see diversification. Retailers will become conglomerates of sorts. Anyone making money the same way in 10 years as they are today will not be long for the world. That’s not to say you have to go build driverless cars or fly to Mars. Olive Garden is one of the most successful chain restaurant companies there is. Why? They realized they needed different price points and concepts and brands beyond just the Olive Garden to grow. Much of the revenue now is non-Olive Garden though that is the biggest household name. If Staples or Toys R Us took that approach 10 years ago, their stories may have been different and for the better.
What technology do you believe will have the biggest impact on the retail industry in the next 3-5?
SK: Not voice. Retailers tell us mobile POS has been really good for incremental sales. I think some version of product tracking, maybe blockchain, maybe something else, will be necessary. We need integrity in merchandise and marketplaces are exploiting the lack of governance in supply chains.
I’m intrigued by computer vision solutions to monitor inventory on shelves. It’s still early days but the lack of precision in inventory in stores is the key reason in my opinion stores have lost share to the web.
What’s the future of brick and mortar retail?
SK: It is more about services. Storefronts will be medical offices and tutoring facilities. Product and restaurant sellers will be architectural delights. They’ll need to change frequently to keep people excited to come back. When a booth at a trade show that services 10k people over a weekend can be put up in a day, I truly don’t understand why it takes a week to redo a fixture in a store. Click and collect will also become much more commonplace.