A veteran retail expert helps me break down the major problems facing brick-and-mortar retail when it comes to accepting technology for innovation and future success.
In the early 1900’s, if you wanted to purchase something, you would go to your local merchant, tell them what you were looking for and wait. The merchant would go to the backroom, find what you were requesting, bring it out, and you would buy it. This was how “shopping” happened until someone came up with the genius idea of letting the customer into the backroom to get their own items. It was faster, more efficient, saved on labor, and just like that, modern retail was born. Not much has changed since then.
I recently hosted Sterling Hawkins, a multi-generational retail expert, on my podcast to talk about this retail innovation gap, and to really highlight why this gap is growing rather than shrinking, and why it matters.
Addressing the Growing Gap
Sterling’s work at CART is advancing retail by connecting the industry to innovation, something the industry so desperately needs. Over the past 75 years, retailers have taken to applying iterative improvements versus engaging technology and riding the exponential growth wave. Because of this, we have seen a lot of retailers take hit after hit, as their business is stolen right out from underneath them. Let’s talk about the biggest problems.
Problem #1: Barrier to Entry
We’ve talked a lot about the barrier to entry for entrepreneurs getting on the shelf, but there’s even bigger barriers we haven’t talked about. The barriers for retailers to technology are massive. In fact, the two industries don’t even speak the same language, and failure to bring in a translator has cost both sides a lot of money and even time.
Problem #2: Lack of Merchants
Retailers aren’t merchants anymore. In fact, they barely resemble anything a merchant used to stand for. Retailers have gotten away from knowing their product, from being in-touch with the product side of things, and that grows the gap. Especially when the designers have been phased out or aren’t familiar with the market at all.
Problem #3: Platform Pitfalls
Retailers are failing to meet customer on the platforms the customer prefers, and instead, spend an awful lot of time trying to persuade customers to join them on “their platform”. Why not just go to where the customers are? Why not join them where they are, rather than trying to persuade them to join you? We see Amazon and startups everywhere acknowledging this shift and taking full advantage of it, while large retailers lose.
Problem #4: Slow Growth
As I mentioned, while retailers are incrementally trying to make things better for their shoppers, technology is exploding. The gap between what retailers are currently offering and what is technologically possible is unbelievable, and growing every day. While the barrier to entry for retailers into technology seems impenetrable, the barrier to entry for an entrepreneur launching an ecommerce site is almost non-existent. So while retailers push ever-slowly into incremental changes that serve almost no one’s actual wants, startups leap into the tech game of sales with both feet.
It Isn’t All Hopeless
Sterling knows retail and it shows. Every aspect of this conversation was derived from a deep understanding of the ebb and flow of our retail marketplace. And while I generally stick with the product side of things, it is important for all of us in business, to perk up and take note. The trends we are seeing now will lay the foundation for the next five years, but not much beyond, as we are seeing the exponential technological growth shift every market it touches. In five years, we will have this conversation again, to say where are we going and where have we been?
This Is How Innovation Happens
The questions, the recognition of gaps and creating potential to fill them, and the ability to connect industries capable of serving one another in growth and innovation. This makes Sterling’s work incredibly important, as we works to close the retail innovation gap, to help retail connect with its audience on a mass scale by taking advantage of the modern day tools that can do the heavy lifting. While the industries of the future will grow in different ways, these will be the processes we employ to inspire that growth.
Read the original INC article published on December 21, 2017.