The changing of the guard at Amazon. After more than a quarter of a century at the helm, Amazon’s founder CEO Jeff Bezos is handing over the reins to former AWS boss Andy Jassy. In this interview with BBC World, I discuss with Sally Bundock the two key challenges that Jassy will inherit – the threat of regulatory action to curtail Amazon’s dominance and ensuring that Amazon does not go from disruptor to disrupted in the future.
Is bricks & mortar retail facing an existential crisis or a rebirth?
In a world where shoppers can buy just about anything online and have it delivered the very same or next day, it’s not unreasonable to ask – what is the point of stores? How can stores possibly differentiate when online shopping offers near-infinite assortment, hyper-personalisation and, increasingly, immediacy?
Over the past 18 months, bricks & mortar stores have been periodically forced to shut their doors and divert their customers to their least profitable channel – e-commerce. Retailers commendably pivoted, and consumers quickly adapted. But what happens next? Will habits learned during lockdown stick, accelerating the demise of the physical store, or will shoppers revert back to their old ways as normalcy resumes? Regardless, the pandemic-induced shift to digital has magnified the urgency for retailers to repurpose the physical space. There will be no return to the status quo.
So how do retailers balance the need for short-term agility with long-term vision? And, more importantly, what data should retailers be using to measure their success?
In this virtual debate hosted by Teradata, Mikael Bisgaard-Bohr, Vice President of Teradata EMEA, Clive Humby OBE, Co-founder of dunnhumby and chief architect of Tesco’sClubcard, and I explore the key traits required as retailers navigate the complexities in this post-pandemic digital era.
“Historically, stores have measured two things – ‘how much and where’ – but what we need to understand is ‘who and why’,” said Humby. “We have got to stop thinking about just the transaction itself.”
Major high street retailers like Next believe that stores now face a “fundamental and irreversible disadvantage” to online and like-for-like sales declines will remain the new normal. I tend to agree. In a post-pandemic world, the role of the store will be three-fold – transact, inspire and facilitate online shopping. If the role of the store is no longer purely to sell, then how should we be measuring its success? Going forward, metrics like dwell time, conversion rates, staff satisfaction and percentage of online orders collected/returned instore are going to be a whole lot more meaningful than measuring the inevitable decline in transactions made within a retailer’s four walls.
US clothing chain Gap is the latest retailer to retreat from Britain’s high streets.
Incredibly sad but probably not too much of a surprise? The uncomfortable truth is that we have too many stores today. Meanwhile, the pandemic is accelerating the demise of mediocre/status-quo/irrelevant retail. Gap is unfortunately paying the price for years of inaction. They failed to adapt, failed to stay relevant to shoppers and failed to differentiate from their peers.
When was the last time you paid full price for something at Gap? Discounting is a zero-sum game.
The big question now is: can they exist as a pure online retailer? Gap joins the likes of Debenhams, Arcadia and T.M. Lewin which have recently disappeared from the high street and resurfaced as online-only brands. Is the Gap brand strong enough to stand out in a crowded online market? A few years ago, O2O (Online to Offline) was all the rage as Amazon, Zalando, Missguided, Boden and others started opening up shops. The Darwinian state of retail….
Perhaps the digital realm will become a graveyard for has-been brands? Gap’s move certainly feels like a slow death to me.