It’s been a tough year for many retailers, but an exciting one too. We have seen new challenger brands rise up, technologies reach the mainstream, and consumer expectations increase even further.
As we bid farewell to 2016 and welcome a new year, most retailers are well immersed in their 2017 planning and strategy. However, it’s important to look back before we look forward, to see how the retail landscape has changed over the past twelve months.
There are too many significant moments to mention in the space of one blog post. However, there are some interesting stories that I would like to pull out; stories that demonstrate shifts in consumer behaviour and retail response, and provide an indication of where our fast-moving industry is heading.
Some big names failed to keep pace with the consumer
There have been some surprisingly large retailers go out of business or downscale their international presence this year. BHS and Austin Reed were two casualties (although the latter has now been rescued by Edinburgh Woollen Mill), while American Apparel, Banana Republic and Staples all shrunk their European footprint.
While market competition can account for some of the attrition, a major contributing factor for many retailers that suffered this year was failing to keep pace with what the consumer wants from bricks-and-mortar.
As some of the other big stories from this year demonstrate, the store’s role is becoming richer and more diverse – and retailers need to focus on bringing the digital world in-store if they wish to flourish in 2017.
Retail became all theatre
In February this year, Samsung broke ground when it opened its 837 store in New York; a flagship for showcasing technology and interacting with the brand, but visitors could not purchase anything on show.
In a blog post earlier this year, I looked at whether experience stores have a value for retailers, and perhaps Samsung took it a step too far. However, their move was a bold statement about bricks-and-mortar’s role as a point of engagement, not just transaction.
The store lost its name
Following on from Samsung’s exploration of the store’s interaction capabilities, Apple decided to redefine its physical retail concept in August, when it dropped the word ‘store’ from its outlet names.
Far from being a pretentious, the terminology change is a move towards positioning Apple venues as a community hub. This is important, as it reflects the fact that bricks-and-mortar is an important place for exploring, learning, curating and socialising. If consumers want convenience, they will turn to their phone or tablet. If they want an experience, now they will look to the store.
Omnichannel was replaced by total retail
This is a much subtler shift, but 2016 marked the year in which industry analysts started moving away from using the term omnichannel, and starting to refer to ‘total retail’.
I think this change is significant, because it implies that most retailers have achieved a certain level of connection and consistency between channels. Now, the challenge is to make sure that connectivity is contextual – so that every shopper can enjoy the right experience, at the right moment, with the right outcome.
There is still work to be done in this area; something I acknowledged in my recent blog post, move over, omnichannel: we’re not talking total retail.
The checkout came under threat
One retail story that is only just emerging, and I think the ripple effect from it will continue into 2017, is Amazon Go. A lot of retailers have been investing in the integration of mobile into the store experience this year, and Amazon is taking it one step further by piloting a store experience in which the checkout process is channelled through smartphones.
This is still very much in pilot phase, and I think there are a lot of considerations and challenges to iron out. However, Amazon’s initiative does highlight the importance of engaging customers at the point of sale – and may well encourage retailers to bring more technology such as mobile POS into their checkout experiences.
What do you think were the defining retail stories of 2016? Tweet us with your suggestions.