A Retail Renaissance—or Apoca-
Given the newfound awareness of the need
to fundamentally change strategies and business models, the collaboration between retailers and their consulting partners seems a safe
bet to thrive throughout 2018 and beyond.
From a consulting perspective, this work
could be valuable on another level. Bieniek
reports that she finds herself more frequently
working with colleagues who advise life sci-
ences, telecommunications, banking and in-
surance companies to “import” customer ex-
perience-related learnings from her retail work
to those industries. Part of this cross-industry
pollination stems from the fact that traditional
companies in many industries face new forms
of competition from digitally born companies,
including Amazon, which has reportedly be-
gun sizing up the pharmacy business.
But other industries are also interested
in retail learnings and insights because the
past 12 months have proven that retail will
remain a fertile ground for innovative business problem-solving, at the most fundamental level, for years to come.
“More digitally native brands are realizing that it’s difficult to achieve sufficient
scale in a purely digital environment,” notes IBM Consumer Industry Center-of-Competence Leader Karl Haller. While a handful of well-known digital upstarts
have scaled well, many other digital retailers are seeking help figuring out how to
vault from, say, $500 million in revenue into the $1 billion-plus tier. The vast majority of the companies in eMarketer’s annual list of top- 25 U.S. e-commerce retailers
are bricks-first giants. After gaining customers through traditional digital marketing methods, e-retailers face the crucial question of what to do next in order to
keep growing. The answers, so far, include direct mail and catalogs, pop-up physical stores and partnerships with larger bricks-first brands.
“We see a lot of toe-dipping into physical presence as the resurgence in
direct mail demonstrates,” says Haller. “And I think we’ll see more [digital-first retailers] open pop-up shops, create rotating stores that serve a specific
purpose for a specific period of time, build out more traditional stores and
partner with larger brands that have that have physical presence. The biggest
challenge for these retailers is figuring out how to keep growing through the
next one, two, or three tiers.” —E.K.
Digital Retailers Step on the Scale
Times are tough for traditional retailers but digital doesn’t have it any easier.