At a time when Amazon aggressively expands into India, Australia, and South-East Asia via Singapore, it’s also time to remind ourselves how the giants can fall.
Retail Innovation is at an all-time High
The Wall-Marts, Amazons, and Alibabas of today are not invincible. While they may cannibalize Macy’s, Target, Kroger and dozens of other retail big-box brands, new entries into the U.S. such as Lidl and Aldi challenge the status quo of grocery retail.
The era of omnichannel Internet of Things in retail is truly upon us. New levels of convenience mean older retail brands have little chance of keeping up.
Target has acquired same day delivery company Grand Juncture, but is it enough? Price wars between Wallmart and Amazon mean the future looks grim for department stores in 2017 what has been dubbed a retail Apocalypse by the media.
The Customer Centricity of Price and Speed
Technology has never been more implicated in retail’s bid to be omnichannel and deliver customer-centricity. If E-commerce was just the trigger, and what’s left are micro battles of innovation and fulfillment, even where innovation meets entertainment. These are wars of digital influence, branding and the future at new scales.
Amazon is now releasing a new service called instant pickup that will have your order ready within 2 minutes.
According to Reuters, the beta includes locations such as five college campuses including the University of California at Berkeley for now and will expand to additional sites, including neighborhood spots within cities, by end of year. Pickup points currently are open at campuses in LA, Atlanta, Columbus, OH and College Park, MD.
Why the Sears Downfall is Important
To be obsessive about innovation means not to take anything for granted and Amazon has done well to embed these values into its culture of excellence and pioneering spirit. This is something executives at Sears failed to do.
Sears has substantial doubt about its future, just as Macy’s is undergoing a shakeup in management. In retail, the winners win big, and the losers keep declining. For Sears, the fall has is a multi-year drama, with lessons, few of us are equipped to fully understand.
The end is near the analysts have been saying for years about Sears. There’s no patching up the bleeding when the fall is from that high. On June 7th, Sears Holdings Corp. announced it will close an additional 72 Sears and Kmart Stores, boosting its total to 250 in this year alone.
Retail and the Future
The rise of e-commerce and Amazon have mirrored the end of Sears, and many believe more big-box retailers will be cannibalized by Amazon as it increases its upwards momentum and scale. The story of Sears is pretty incredible, and you would have to remember its height to appreciate its fall.
The retail carnage today is a story of not adapting to the future, in technology and how the new consumer behaves. This kind of agility is a business model, it’s a mindset and a philosophy and a way of handling management. For retail entrepreneurs, it’s also the ability to risk trying new things in the marketplace.
Amazon isn’t just a technology company; it has successfully adapted to become a consumer-centric AI and entertainment company. This is because that’s where the future lives. GenZ, the youngest studied group in retail, are now graduating from University and have grown up not just with mobile devices but with new ideas on what experience and entertainment look like.
What is GenZ Teaching us about the New Consumer?
Gen Z is defined as the cohort of individuals born after 1995 who are successors of the Millennial generation.
- GenZ prefers mobile to human customer service and voice to mobile.
- GenZ consumers are pragmatic savvy discount-native shoppers.
- GenZ shoppers aren’t just technology addicts, they are entertainment addicts in new and distinct ways.
- GenZ consumers are experiential and enjoy shopping in brick-and-mortar stores.
- GenZ shoppers have grown up with Amazon and take convenience, speed and omnichannel for granted, but value authentic retail branding of small-box merchants.
Technology namely mobile devices, e-commerce, video on demand and on-demand services are just the new normal to young people in the GenZ cohort. Their social lives, experiences in the real world and online life are completely intertwined. Digital influence itself is a means of their social experience. This is important for even local retailers to understand.
GenZ may have less discretionary spending than previous generations, as the workforce changes and as society as a whole adapts to technology. GenZ displays new and distinct eating patterns in a continuation of the preference of Millennials where cooking at home is on the decline in favor of apps that deliver meals and food on-demand.
Mobile devices dominate but many GenZ increasingly use a voice interface to interact with their mobile smartphones. In addition, a new range of smart speakers in the home means GenZ are the early-adopters of these technologies, along with their younger Alpha siblings.
GenZ also sees technology increasingly as a means for entertainment and instant fulfillment. For retail experiences, entertainment has to be considered a bigger motivation than education for young people in general. Changes in how retailers do showrooming mirror the new trend of consumers to do BOPIS; where the store experience is just a part of the retail customer experience. The rise of retailtainment also means in live-video and video games, both verticals Amazon have gotten into via its acquisition of Twitch.
Quality still matters. While we’ve come to associate younger Millennials as discount bargain off-price shoppers, GenZ still signals quality as the defining factor of the greatest importance. Increasingly this means being an ethical, authentic and sustainable brand as well.
GenZ are more aware of their private data and willing to barter it for exceptional results. In an era of cyber breaches, mobile Ad-blockers and greater emphasis on AI and product suggestions, GenZ do appear more open to sharing data for greater retail personalization.
GenZ do appear to use social media differently than Millennials. Greater video consumption and less time spent on older networks such as Facebook and Twitter mean more time spent on Instagram and Snapchat.
While GenZ still love stores, it’s fairly obvious they expect mobile interaction as well. They are more comfortable with E-commerce than any other generation. They are more influenced by digital influence than any other generation but still are for the most part store-centric in how they spend their time interacting with retail.
Edit: This article represents the opinions of the author only and doesn’t represent the views of any organization.
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