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Discount

What Aldi’s expansion plans tell us about the current state of retail

I can count on one hand the number of UK retailers that can still get away with aggressive physical store expansion while broadly shunning e-commerce – Primark, Aldi and… yep, that’s it.

At a time when most retailers are re-evaluating portfolios and shuttering stores, Aldi has announced plans to open hundreds of new stores, including doubling its presence in London. By 2025, Aldi is expected to trade from 1,200 UK shops, up from just 840 today. The space race isn’t over just yet.

Note: this is an excerpt. Continue reading Natalie’s full article on Forbes.

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Store of the future Technology

The case for seamless, not soulless, experiences

In the second of a three-part whitepaper series from Red Ant and NBK Retail, we explore the rise of the experiential store, why retailers must adopt an ‘admission fee’ mentality, and how customer experience is fast becoming the new currency in retail.

Despite the high-profile casualties we’ve seen on the high street, it’s clear that shoppers still crave the experience of visiting stores. But the service they receive in store must surpass what they would find online. We’re currently in a moment of transition, where the physical store is shifting from transactional to experiential.

Kill the friction, not the experience

Today, there’s still a sense of novelty when shoppers encounter a frictionless store experience, but in the future, digitally enabled store experiences will become the norm.

The option to bypass the checkout, for example, will simply become an expectation. This will be ‘basic hygiene’ that retailers must follow to remain relevant to their customers.

While it’s essential to invest in the right technology to facilitate a seamless in-store experience, retailers must also ensure ‘seamless’ doesn’t translate as ‘soulless’.

Retailers are experimenting with a plethora of technologies to enhance their environments and to finally bring the physical store into the 21st century. However, they must guarantee that it’s friction that they’re killing, and not the experience.

Democratising the white glove service

Just as the role of the store must evolve, so must the role of the store associate. They must be able to demonstrate genuine expertise, offering advice and personal recommendations to become a ‘trusted shopping companion’.

“29% of consumers said they would spend more money if a sales associate recommended something to complement their purchase”

In the future, what was once considered a VIP service will be democratised as more mainstream retailers recognise the benefits of providing concierge-level service.

John Lewis has already begun sending staff to theatrical training to improve customer experience, and the department store chain is also giving employees a voice by allowing them to directly engage on social media.

Retailers must aim to provide that white glove service because customer-led clienteling pays. Being able to provide a one-to-one, face-to-face personalised service has the power to increase sales and drive loyalty.

In our own OnePoll survey, 27% of consumers said that having an expert to talk to would make going into a shop worth their while.

And 29% of respondents agreed that they would spend more money if a sales associate recommended something to complement their purchase (based on what they had previously bought or had on their wish list).

The value of human interaction

At the end of the day, the most important rule in retail is being relevant to your customers.

Technology can help retailers augment the human touch, allowing them to adapt and thrive in the digital world. Today’s consumers may be hyper-informed and accustomed to shopping on their terms, but they still value human interaction – particularly when it comes to advice and inspiration.

“Employees are retailers’ most valuable resource”

With so much change afoot, it may be overwhelming for retailers to know where exactly to begin but they should start with their most valuable resource – their employees.

Retailers can democratise the VIP experience by equipping staff with the technology they need to offer specialist, personalised advice and information.

Consumers are no longer tolerant of mediocre service, so retailers must raise their game if they want to differentiate from online rivals and survive in this digital era. Clienteling and consultancy should not be beyond the reach of any retailer that wants to build an experience.

Download Store of the Future: The Experiential Store now to get the full picture.

Categories
Amazon E-commerce Technology

How to compete with Amazon

How can retailers compete with Amazon? This is the question that my co-author Miya Knights and I get asked most since publishing our book earlier this year.

First, let’s address the myth that Amazon is a retailer. It’s not.

Amazon is a technology company with deep pockets, an appetite for disruption, and a constant dissatisfaction with the status quo. Amazon is a fierce competitor not only because it is infatuated with its customers, but also because it has the advantage of playing by its own rules, shunning short-termism and other traditional constraints faced by public retailers.

From a CX perspective, Amazon has made online shopping completely and utterly effortless. The ability to access millions of products and have them magically turn up on your doorstep the same or next day is pretty powerful, and Amazon has gone to great lengths to ensure that the experience is as seamless as possible. They continue to reduce friction by shortening the path to purchase – this will be a key focus in the future as Amazon relies more heavily on its own devices to funnel purchases through to its platform.

Ultimately, it’s the ease of buying through Amazon or, as Miya often says, it’s how Amazon sells rather than what it sells that distinguishes them from their peers.

Amazon is the ultimate friction killer, but that inherently makes them somewhat of an experience killer. Amazon is functional, it’s transactional. It’s great for ‘buying’, but pretty awful for ‘shopping’. So how can retailers remain relevant in the age of Amazon?

Firstly, there is an element of keeping up with the Joneses. Most of Amazon’s innovations catch competitors on the back foot, leaving them in the undesirable position of reacting to rather than leading change. Ceaseless innovation from Amazon raises customer expectations which in turn leads competitors to raise their game and ultimately results in a better experience for the shopper. What would retail look like if Amazon didn’t exist? In a nutshell, customers would be far more tolerant of mediocre service.

No one can out-Amazon Amazon, but retailers must prioritise investment in the areas where Amazon is genuinely disrupting customer expectations – frictionless e-commerce experience, delivery speed and choice, voice shopping, auto-replenishment, checkout-free stores and, increasingly, a digitally enabled instore experience.

That’s just basic hygiene. The real opportunity for bricks & mortar retailers is to focus on WACD – What Amazon Can’t Do. That’s experience, curation, discovery, inspiration, human touch, community. It’s time to inject some personality and soul back into stores, to make them desirable places to visit, places worth ditching our screens for.

Amazon taken the touch and feel out of shopping and there is a massive opportunity for retailers to distance themselves from this by offering customers an immersive, memorable experience that simply can’t be replicated online. But this requires a titanic cultural shift and an entirely new set of skills from store associates who must transition to become genuine brand ambassadors. Stores must go well beyond the product, beyond the transaction. They must become places to eat, play, work, discover, learn and even rent stuff. In the future, retail space will be less about retail.

In summary, there is no single formula for competing with Amazon but retailers can take lessons from the tech giant itself by starting with the customer and working backwards. Think of your stores as assets and not liabilities. Reposition them as fulfilment hubs to cater to growing demand for same-day delivery and instore collections, while potentially beating Amazon to the chase by addressing the ticking time bomb that is returns. The instore experience must be frictionless to emulate the convenience of buying online, but also experiential to differentiate from Amazon’s transactional nature. The rise of Amazon will also make for strange bedfellows – collaboration, in some cases with Amazon itself, should be viewed as an essential component of retail strategy in a bid to stay relevant to customers.

This post originally featured on RingCentral’s blog.

Categories
Amazon Store of the future Technology

Don’t believe the hysteria over till-free stores

We all know it’s only a matter of time before Amazon Go reaches UK shores. Trademarks have long been registered, the rumours have been flying and, having debuted in New York City last month, it’s fair to say that Amazon has an appetite for urban expansion.

This explains Sainsbury’s recent scramble to open the first till-free store in the UK, a PR coup ahead of Amazon’s inevitable incursion.

And they’re not alone – pretty much every grocer from Tesco to Marks & Spencer is trialling scan-and-go technology, self-ordering kiosks are now the norm at McDonald’s and Argos quietly launched its first self-service digital store last month. Time is the new currency.

Checkout-free shopping will particularly cater to busy city workers on their lunch break and it will undoubtedly hit travel retail hard – till-free will become the norm in airports and train stations five years from now. But is this really the future of retail?

The customer experience is paramount, but today ‘frictionless’ often translates as ‘soulless’. Most shoppers still value human interaction in-store and, as we’ve witnessed with self-checkout, there will be resistance among some shoppers to do the heavy lifting themselves.

Source: Sainsburys

Take the new Sainsbury’s trial, for example: for a store that’s all about reducing friction, there’s certainly a lot of it initially as shoppers have to download the app and get used to scanning QR codes.

Let’s not forget that, a few years ago, Morrisons scaled back its self-checkout ambitions in response to customer feedback. There has been a lot of hype about automation, but when it comes to responding to disruption, retailers must not lose the human touch.

Defending cash

Checkout-free stores can be controversial. Not only because they will accelerate the number of retail job losses (according to the Office for National Statistics, 25% of supermarket checkout jobs disappeared between 2011 and 2017), but also because going cashless can be seen as discriminatory towards customers without bank accounts or smartphones.

This summer, Philadelphia will be the first US city to prohibit cashless stores, and a growing number of cities are considering a similar ban. Amazon has had little choice but to begrudgingly adapt, and its shiny new Manhattan store is the first Go branch to accept cash.

Lastly, we must acknowledge the elephant in the room: theft. Today, it feels unnatural to bypass the checkout, and Amazon says it takes customers several visits before they no longer feel like they’re shoplifting.

But theft is a genuine concern and was one of the reasons Walmart shelved its scan-and-go programme in the US last year, with a former executive joking that the scheme should have been simply called “‘go’ because the customers can’t seem to ‘scan’ anything”.

The biggest retailer in the world is now embracing a mobile point-of-sale solution. Equipping more staff with handheld devices so shoppers can pay on the spot is a solid compromise – you still provide a frictionless checkout experience while taking the onus off the customer and alleviating concerns over shrinkage.

I don’t doubt that the digital store is the future of retail or that checkout-free shopping will appeal to certain customers and shopping missions. But consumer adoption will be slow, and they will never replace manned checkouts entirely, which is why the hysteria over till-free stores is unwarranted.

Automation is coming but, in the process, retailers must ensure they don’t kill the experience they are working so hard to improve.

This article originally appeared on Retail Week

Categories
Amazon Fulfilment Retail trends Store of the future

Co-opetition hits the high street

Is this the future of the high street?

According to Next’s CEO Lord Simon Wolfson, a partnership with Amazon is one of the ways they can stay “relevant” to shoppers.

And I have to agree. In the UK, Amazon is the 5th largest retailer. Nearly 20% of retail sales now take place online and, although we don’t have official data, I would estimate that Amazon accounts for 40% of that spend.

So how do you evolve?

How do you repurpose your physical space? I’ve said time and again that stores need to become: 1) frictionless; 2) experiential; and 3) a hub for fulfilment. Ticking that last box, hundreds of Next stores will now allow shoppers to collect their Amazon parcels instore through a new program called Amazon Counter.

It’s not dissimilar to Amazon’s US partnership with Kohls, which has been wildly successful and is now being rolled out across the entire store estate. Kohl’s stores however also handle Amazon returns and I imagine this will come in time as they look to address what is very much the Achilles heel of e-commerce.

Meanwhile, in France, Casino recently announced plans to expand its partnership with Amazon by adding 1,000 collection lockers to its supermarkets. Next isn’t the only one willing to dance with the devil.

Co-opetition: it’s only the beginning

Co-opetition was a key theme throughout our book. In Chapter 2: Why Amazon is Not Your Average Retailer, we wrote:

In the future, more retailers will run on Amazon’s rails. Retailers themselves are increasingly content to overlook the huge competitive threat posed by Amazon to take advantage of their physical and digital infrastructure. Some may consider it playing with fire – certainly retailers like Toys R Us, Borders and Circuit City would. They were among Amazon’s very first ‘frenemies’ in the early noughties when they outsourced their e-commerce business to the giant – all three have since gone bankrupt. But we believe more retailers will cozy up to Amazon if it helps them to achieve greater reach (marketplace), drive traffic to stores (Amazon pop-ups, click & collect, instore returns) or improve the customer experience (same-day delivery, voice-activated shopping). The unique dual role of competitor and service provider is becoming more apparent by the day. ‘Co-opetition’ is a key theme for the future.” [Berg & Knights. Amazon: How the World’s Most Relentless Retailer will Continue to Revolutionize Commerce, p23, Kogan Page.]

Later in our book, Miya and I predicted that Amazon would team up with a retailer like M&S or Debenhams; Next is actually a far better fit so consider this a coup for Amazon.

More than half of Next’s sales now take place online and a good chunk of those are collected instore. They recognized early on the importance of repurposing their stores to cater to today’s ‘on-my-terms shopper’.

Despite falling like-for-likes, Next is yet to embark on a radical store closure plan. They understand that the store’s role is no longer purely about selling and that having a strong physical presence is an incredibly valuable way to engage with shoppers, let them try stuff on, collect and return orders (as evidenced today) and also offer an experience they can’t get online. I’d argue prosecco bars and hair salons may be a step too far (Debenhams is closing its instore gyms, anyone surprised?) but certainly coffee shops and collaboration with other retailers like HEMA, Paperchase, Mamas + Papas is the way forward for a high street retailer like Next.

Amazon is not a credible fashion destination

Next’s willingness to partner with Amazon is also a sign that they don’t see them as a threat, despite Amazon building up its own arsenal of fashion brands. Never underestimate Amazon, of course, and I certainly don’t doubt that they can sell ‘clothes’ but I just can’t see them cracking ‘fashion’. But more on that another day.

Categories
Retail trends Store of the future Technology

Why the digital store is the future of retail

I’m so excited to launch, in partnership with retail technology leader Red Ant, the first of a three-part series of whitepapers to explore how the retail industry will have to embrace the digital store and seamless shopping to survive, from frictionless checkout to hyper-personalisation and clienteling. There’s no doubt that the industry has undergone seismic change in the last few years, and it’s not over yet.

Why the store is not dead

Over the past decade, we’ve witnessed the birth of the ‘on-my-terms’ shopper and the seemingly unstoppable rise of e-commerce. Today’s ubiquitously connected shoppers are firmly in the driving seat, and retailers are scrambling to keep up with dramatic shifts in both customer behaviour and expectations.

It’s clear that not all retailers have been equipped to deal with the accelerated pace of change facing the industry. As such, we’ve seen high-profile casualties on the high street as well as record numbers of job losses and store closures. And we should be bracing ourselves for more short-term pain as the industry reconfigures for the digital age. Although it’s not quite a retail apocalypse, there are a couple of important points that we must acknowledge:

  • We have an oversupply of retail space. According to the Office for National Statistics, online sales accounted for less than 5% of UK retail sales in 2009. Fast forward to 2019 – a whopping 20% of retail sales now take place online. Although e-commerce shouldn’t be viewed as the death knell for the high street, retailers must streamline their store portfolios to better reflect consumer demand. The future is fewer, more impactful stores.
  • There is no room for mediocre retail. In today’s climate, you have to be on top of your game. The retailers that are struggling right now share some common traits – they lack agility, differentiation, relevance. They try to be all things to all people. They don’t have a compelling purpose. And having an iconic brand doesn’t make you immune to the broader challenges facing the high street. This is retail Darwinisim – put simply, you evolve or die. But, for those brands willing to adapt, this is a fantastically exciting time to be in retail.

Stores will undoubtedly continue to play a critical role in retail for decades to come, but, in a nutshell, customers will expect to shop on their terms, not the terms dictated to them by the retailer. This means that high street retailers need to ensure they’re saving customers’ time or enhancing it. There is no longer a middle ground. We believe that stores of the future will be:

  • Frictionless – to keep up with online retail
  • Experiential – to distance themselves from online retail
  • A hub for fulfilment – to bridge the gap between online and offline worlds

Those retailers who use the right digital platform to transform and tailor in-store experiences will be able to ensure differentiation from rivals and relevance to customers.

Download Store of the Future: The Digital Store now to get the full picture.

Categories
Amazon

Amazon book launch [VIDEO]

It’s been a busy 8 weeks since our book was launched…

I often get asked what the book covers, what’s our hook, and, without fail, ‘is it available on Amazon’?

So I’ve decided to round up some of the interviews, podcasts and general discussions that Miya and I have had over the past two months, including today’s interview on tech TV channel Disruptive Live.

Hope it gives you a flavor of the book. And, yes, it is available on Amazon. 😉

https://www.youtube.com/watch?v=Thx4_CulYQI&t=21s

Blog

What is ‘The Amazon Effect’ really?

TV

BBC World News (TV): Amazon’s Q4 results

Podcasts

Print

Categories
Retail trends

Peak stuff: the rise of rental retail

Whenever I give talks on the store of the future, I always sum up with this line: the store won’t just be a place to transact but also to eat, play, work, discover, learn and borrow.

There’s usually a lot of nodding heads until I mention the b-word. Fair enough – shops naturally want to sell, rather than lend, to their customers.

In fact, our very economy depends on it.

Over half a century ago, American economist Victor Lebow noted how the economy “demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption… we need things consumed, burned up, worn out, replaced and discarded at an ever-increasing pace.”

That was in 1955.

The times are finally changing. We are entering an age where access will trump ownership. This is due to the combination of a growing population, unprecedented connectivity and shifts in consumer values and priorities.

We are no longer defined by our material possessions. Instead, we’re opting to spend less on stuff and more on experiences.

Last year, according to a Barclaycard UK survey, expenditure on entertainment and travel generated the highest growth (9% and 7% respectively), while spending in most discretionary retail categories was either flat or in decline.

Millennials and younger generations are increasingly – though not necessarily willingly – forgoing ownership of homes, cars, bikes, music, books, DVDs, clothes and even pets. Meanwhile, the World Economic Forum predicts that by 2030, products will become services and the notion of shopping will become a “distant memory”.

The trend is compounded by a growing awareness of sustainability and, therefore, more mindful consumption. The concept of a circular economy is gaining momentum and it’s going to hit retail hard.

Service, share and rent

Ikea made waves with its recent announcement of a trial furniture rental scheme in Switzerland. This might sound like a radical departure for the flatpack king, but let’s not forget that Ikea was one of the first retailers to address the rather thorny topic of ‘peak stuff’ a few years back.

It has since set the ambitious goal of using only renewable and recycled materials in its products by 2030. In some markets, Ikea already buys back used furniture so the rental scheme is a natural extension.

When Boots boss Seb James was running Dixons Carphone, he acknowledged that shoppers were only “grazing on ownership” and expressed an interest in a similar type of subscription model for durable goods.

And you can see what’s in it for the retailer. Aside from the obvious eco brownie points, rental schemes allow retailers to get closer to customers by offering additional services such as assembly and repairs. This idea of ‘retail as a service’ is exactly why Ikea acquired Taskrabbit last year.

In today’s market, you have to transcend the transaction and develop a deeper emotional connection with your customers.

The category most familiar with rental retail is fashion. Luxury retailers have spearheaded the trend, with Rent the Runway describing itself as the world’s largest dry cleaner. But can it go mainstream?

Property giant Westfield thinks so. Its vision for the shopping centre of the future, dubbed Destination 2028, reflects the rise in the sharing economy with space dedicated to renting everything from clothes to exercise gear.

Rental retail makes sense, first and foremost, for those categories where the product itself can be delivered digitally – music, video, etc. And there is clearly demand for rental fashion among younger consumers which could solve the industry’s latest dilemma: ‘wardrobing’ (the ugly, unintended consequence of free delivery and returns).

But for those products that don’t become services, retailers should be seeking to extend their lifecycle. The days of throwaway fashion are numbered, and high street retailers are already taking steps to address our culture of waste.

H&M, for example, runs ‘Take Care’ workshops in some stores to educate shoppers on how to get more life out of their wardrobe.

Whether it’s teaching customers how to remove a stain or leasing them an entire kitchen, retailers need to start thinking of new, innovative ways to serve a more conscious, no-strings-attached consumer.

A version of this article originally appeared on Retail Week.

Categories
E-commerce Retail trends

The Retail Summit: 5 takeaways

What a fantastic couple of days at The Retail Summit in Dubai. I had the pleasure of moderating two sessions on e-commerce and ‘new retail’ and interviewing a number of retail CEOs over the course of the event (to be shared in the near future!)

Here are my 5 key takeaways:

What apocalypse?

It’s funny how once you step outside the UK or US, words like apocalypse stop cropping up. There was a genuine sense of excitement among international retailers, many of which are in the advantageous position of not being in an overstored market to begin with. Store revitalization is easier when you have a clean slate.

Store reinvention – bring it on.

It’s clear that, even for retailers in mature markets that are contending with an oversupply of retail space, store reinvention is not optional. But all of the retailers I spoke to were optimistic – some even oozing with enthusiasm – about the future of retail, acknowledging that there will be losers along the way, but the ones that survive this transition will be better retailers as a result.

Chieh Huang, Founder of Boxed, and Bouchra Ezzahraoui, co-founder of AUrate, tell me how they’re disrupting the status quo.

Amazon’s existence is making for better retailers.

I always like to throw the A-word into the mix. Everyone I spoke to was quick to acknowledge that there’s no such thing as being ‘Amazon-proof’, but equally that Amazon isn’t the be all and end all of retail. Many CEOs were keen to point to the fact that Amazon can’t do curation, community, experience, discovery, personalization – all the things Miya Knights and I highlight in our book. This also means an end to ‘being all things to all people’ and that we’ll see more specialist, disruptive retailers popping up, catering to specific customer needs and styles.

Equally, Chieh Huang, founder of Boxed, told me how the Amazon/Whole Foods deal was actually beneficial in that it stimulated demand for online grocery in the US (although in the process it also created stronger competition as legacy retailers upped their game). Huang’s point echoes past comments from CEOs of Ocado and Instacart, the latter even referring to Amazon/Whole Foods as a “blessing in disguise”.

Let’s rethink the terminology.

Bouchra Ezzahraoui, co-founder of AUrate, a direct-to-consumer fine jewelry brand (the ‘Stitch Fix for jewelry’) told me that she doesn’t have employees, she has brand ambassadors. And I couldn’t agree more. As shopper expectations exponentially increase, retailers have to work harder than ever before to keep them happy. What was once considered a luxury or VIP service is now becoming the norm – everything from personal shopping to in-home delivery is becoming democratized. Therefore, customer service and experience should be prioritized and you’ll only get that with an empowered workforce. I’d argue that ‘employee’ isn’t the only word that should be reconsidered. What is a retailer? A store? The boundaries are blurring as retail space becomes less about retail, but more on that another day.

Joel Palix of Feelunique, Ghizlan Guenez of The Modist and Beth Horn of Facebook give their views on the future of retail

E-commerce retailers also need to become experiential.

Building trust and engaging with shoppers is always more challenging in a digital environment, particularly for smaller retailers. The co-founder of Made, Julien Callede, acknowledged that sometimes the best way to build trust is by (wait for it) opening a store. As we know, many digitally native brands are now moving into the physical space to offset rising shipping/customer acquisition costs, raise brand awareness and therefore grow online sales, and, for some, because they see an opportunity to disrupt the store experience. But for those retailers looking to stay purely online, there’s still an opportunity to help shoppers discover new items through product sampling, something Joel Palix has initiated at Feelunique, or through the use of influencers, as Ghizlan Guenez of The Modist has done (and in doing so, has helped modest fashion to break through to the mainstream).

For more insights from The Retail Summit, click here.

Categories
Amazon E-commerce Store closures Store of the future Technology

What is ‘The Amazon Effect’, really?

The phrase ‘the Amazon effect’ brings to mind images of boarded-up shops and retail bankruptcies.

We think of the 2,700 stores that shut or the 80,000 retail jobs that disappeared in the UK in the first half of 2018 alone. E-commerce, and Amazon in particular, is often positioned as the death knell for the high street.

I don’t buy into the ‘retail apocalypse’ narrative, but it must be acknowledged that this is a period of unprecedented change and naturally as spending shifts online, fewer stores are needed.

This isn’t rocket science, it is just about following the customer. Over the past five years, online sales of non-food products in the UK have doubled. Now, nearly 20% of all retail sales take place online. Today, people are ubiquitously connected. They live online. They have access to billions of products right at their fingertips that turn up on doorsteps, often free of charge, the very next day.

Online shopping has become utterly effortless, and that has shaken bricks-and-mortar retail to its core. 2018 was the year that retail chief executives finally pulled their heads out of the sand and acknowledged that there is an oversupply of retail space and there is retail space that is no longer fit for purpose.

Blaming Amazon

Amazon is an easy scapegoat. After all, it’s thought that around a third of UK e-commerce sales go through Amazon’s platform (in the US, it’s closer to the 50% mark).

And, after years of chipping away at the high street, Amazon is now among the top five retailers in the UK. Not many retailers can match ‘the everything store’ on range, convenience and, perhaps to a lesser extent, price. Not many retailers have 100 million customers around the globe willing to fork out roughly $100 annually just for the privilege of shopping with them. Not many have embedded themselves into the shopper’s life – and physical home – in the way that Amazon has; a testament to the strength of its ecosystem.

But it is also true that not many retailers have deep pockets like Amazon – it spends more on R&D than any other American company. It is able to constantly throw ideas against the wall because it has been afforded the luxury of long-term thinking – and not paying a whole lot of tax hasn’t hurt. Business rates account for less than 1% of its sales (for comparison, Debenhams’ bill as a percentage of sales is almost 4 times that amount). The playing field has been tilted in Amazon’s favour since day one and I believe retailers are right to call for legislation to be rewritten for the digital age.

High street woes go beyond Amazon

But the industry’s problems run deeper than Amazon. Retailers continue to grapple with the dangerous combination of rising costs and soft demand which has created considerable pressure and particularly exposed some of the weaker retailers with underlying issues, such as Toys R Us.

Real disposable income growth has been weak for a good decade and now the big unknown that is Brexit is added to the mix. In a similar vein to the weather, Brexit may be a convenient excuse for retailers reporting weak results, but it’s clear that shoppers will rein in spending during times of political and economic uncertainty.

What else is behind the high street’s woes? Although ‘the Amazon effect’ is often cited, what about ‘the Aldi effect’ or ‘the Primark effect’? There are a handful of very agile bricks-and-mortar disruptors that are weeding out the complacent incumbents.

We are at the beginning of quite a fundamental shift in consumer values, as shoppers prioritise spending on experiences over simply acquiring more material goods. Are we perhaps nearing ‘peak stuff’?

In any case, it’s clear we are at the intersection of major technological, economic and societal changes that are profoundly reshaping the retail sector.

Amazon isn’t killing retail, it’s killing mediocre retail

So it’s not all Amazon’s fault. In fact, in many ways Amazon has been a force for good. It has stamped out complacency and made everyone raise their game, all to the benefit of the customer.

What would retail look like if Amazon didn’t exist? In a nutshell, consumers would be more tolerant of mediocre service.

Amazon’s technology roots and passion for invention are what sets it distantly apart from rivals. Many of Amazon’s past innovations can, in fact, be easily forgotten because they have simply become today’s normal. Think back to the late 1990s: online shopping used to be quite a laborious process. Amazon cut the friction out by launching one-click shopping, personalised product recommendations and user-generated ratings and reviews.

Delivery, meanwhile, wasn’t always fast and free. Prime significantly raised customer expectations, leaving competitors with little choice but to invest in their own fulfilment capabilities. Amazon went on to tackle one of the biggest barriers to online shopping – missed deliveries – with the 2011 launch of Amazon Lockers. Today, virtually every major Western retailer offers click-and-collect (though Argos was perhaps unknowingly ahead of its time).

Most of Amazon’s innovations catch competitors on the back foot, leaving them in the undesirable position of reacting to rather than leading change. So what is ‘the Amazon effect’, really?

It’s Tesco rolling out same-day delivery nationwide.

It’s M&S trialling scan-and-go technology, allowing shoppers to skip checkout queues ahead of an impending Amazon Go launch in London.

It’s Waitrose delivering groceries directly into your fridge.

It’s Asos allowing shoppers to ‘try before they buy’.

It’s Zara shoppers collecting their online orders through automated pick-up points in-store.

And this is a global battle. ‘The Amazon effect’ is Ocado finally securing a string of international deals, as the Amazon-Whole Foods acquisition accelerates demand for online grocery shopping.

It’s Carrefour partnering with Google to launch Lea – its answer to Amazon’s Alexa voice assistant. In the US, Walmart offers customers a far superior experience today thanks to Amazon breathing down its neck. The retailer has even had a name change: after nearly half a century as Wal-Mart Stores, in 2018 the world’s largest retailer dropped Stores from its legal name to reflect the new digital era.

Amazon has impacted all aspects of retail, and now everyone is scrambling to either keep up with or distance themselves from the online behemoth. The link may be slightly more tenuous but it could even be argued that ‘the Amazon effect’ is Debenhams adding gyms and beauty bars to its stores. It’s John Lewis sending staff to theatre training and democratising personal shopping. It’s Next putting hair salons and Prosecco bars in its shops.

The opportunity

High street retailers are recognising that for all its perks, shopping on Amazon is still quite a functional, transactional experience. It has taken the touch and feel out of shopping and there is a massive opportunity for retailers to distance themselves from Amazon’s utilitarian image.

There is an opportunity to inject some personality and soul back into their stores, providing an immersive, memorable experience that simply can’t be replicated online. It’s about WACD: What Amazon Can’t Do.

This is why in the future, stores won’t just be a place to buy but also a place to eat, play, work, discover, learn and even borrow stuff. Retail space will be less about retail.

In summary, Amazon is almost singlehandedly redefining retail, at least in the Western world. Yes, there have been casualties and the industry should brace itself for more short-term pain as it reconfigures itself for the digital age.

But this is retail Darwinism, it’s survival of the fittest. It’s evolve or die. Amazon’s existence has weeded out those underperforming retailers who can’t deliver on the basic principles of being relevant to their customers or standing out from rivals. But those left standing will be stronger for having reinvented themselves in the age of Amazon.

Amazon: How the world’s most relentless retailer will continue to revolutionize commerce, by Natalie Berg and Miya Knights, is published this month by Kogan Page.

A version of this article originally appeared in Retail Week