We are all familiar with the expression “Survival of the fittest” from Darwin’s theory of evolution and natural selection. The theory poses that organisms that are able to pass along favorable traits will help the survival of their species. For example, some giraffe species have long necks, while others have short ones. If something were to cause all the low-lying shrubs to die out, the giraffes with short necks would be unable to find food. In this situation, according to Darwin, new generations of giraffes would have long necks due to the inability for the short-necked giraffes to survive and reproduce.
So, what do giraffes and retail have in common? The answer – everything.
Nature is modifying the retail landscape – and retailers who adapt rapidly are thriving, while others are facing extinction. Remember Sears? Or as I like to call them, “Analog Amazon”. Sears was a company that had the blueprint for success for over 100 years with their famous Sears catalog. When the digital revolution was in its infancy, they didn’t adapt or act on the opportunity before them.
Unlike the giraffes, retailers can use Sears as a cautionary tale and adapt to the new world before they go extinct.
Retailers like Walmart and Walgreens have already altered themselves to meet the demands of the new retail environment. They have invested in providing a universal customer experience, regardless of the physical location of the customer – whether it be store, online or using their device. This adaptation has protected Walmart and Walgreens from the onslaught of companies like Amazon, who have preyed unabated on the stagnant retailers.
In today’s climate, there are two elements determining the long-term viability of retailers: economic pressures and technology.
From an economic perspective, we know retail is not dead – in fact, we are seeing a revitalization. The key factor here is market area, specifically the healthy growth of the big-ticket and discount arenas. Growing wealth disparity creates opportunities for supporting shoppers who can’t access the e-commerce marketplace, due to financial or credit limitations.
On the opposite end of the spectrum, big ticket items, such as jewelry and high-end fashion and electronics/devices, are flourishing in retail because shoppers want to interact and be delighted by their shopping experience.
This is great news for retailers who can adapt. Those willing to quickly and efficiently adopt innovation to survive will dominate this ever-changing ecosystem – survival of the swiftest.
In part 2 of this blog series, I’ll discuss the role of technology and how retailers should be leveraging it to evolve their customer experience, supply chain, and strategy.