The Reinvention Of Retail Demands New Metrics
Recent retail earnings, as well as various industry reports, continue to support three continuing and profound trends. First, those retailers stuck in the vast and largely undifferentiated middle (think Macy’s, JC Penney, Gap and Sears) continue to struggle and, in some cases, face existential crises. Second, physical store traffic remains down almost entirely across the board, with little prospect of reversing. Third, e-commerce continues to gain overall market share at the expense of brick & mortar. Given this new reality, this new retail world order, it’s time re-think what future success looks like and develop a set of new metrics. Same store YoY as the metric of choice is a decision to hold onto the past, to refuse to accept that the metric was built for a world in which we no longer live. Retailers who refuse to change, to evolve to this new reality, further their risk of irrelevance. While the future of retail will be unevenly distributed, it’s clear that the shopping process for both industry and consumers is evolving rapidly and is far more nuanced than many realize. While the growth of online shopping seems to get the most attention, the far more important dynamic is the degree to which most consumers’ shopping journeys start via a digital channel, regardless of where the ultimate transaction is rung. Retail brands as diverse as Target, Nordstrom and Neiman Marcus indicate that more than 60% of physical store sales are influenced by a digital channel. Data from Deloitte not only bears this out more broadly, but also affirms the rapid pace of change. Read more at Forbes.
