The Future of Retail
It doesn’t come as a surprise that the retail sector is still suffering from sales losses due to online giants such as Amazon. In the US alone, Amazon recorded more than 94.7 billion online sales – that is 70% of its total revenue, according to eMarketer. Chris Anderson explains in his book “The Long Tail” what those figures mean for the retail sector: it is about time for retail to move away from the classic model of selling only a small number of products and moving toward a system of billions of niche products. Anderson describes the future of retail as “selling less of more.”
Just ten years ago, shelf space in local shops was expensive, and retailers had to be very selective with the products they put up for sale. Today, digital shelf space is nearly unlimited. Again Amazon: Right now, the company has more than 580 million products available online. However, niche products can only be one part of the solution. Much more critical, I believe, is nailing the customer experience in stores, especially when it comes to products that don’t sell well online.
Take shoes, for example. As part of their new flagship store in Sydney, the upmarket Australian department store David Jones has developed a “shoe heaven.” Specialized sales personnel recruited from around the world deliver high-end customer service with a good dose of international flair. If you need to re-energize, you can take a break at the champagne bar on the mezzanine floor which overlooks “shoe heaven.” The two floors dedicated to men’s clothing will sport a Whiskey bar and a barber after the re-opening in September. David Jones sets the tone: If retailers want to hold their ground, they have to focus on the customer’s experience. Part of that focus is a mix of high-end products, extraordinary customer service and an offer of those personal services that combine business with pleasure. I believe that shopping must become more personal again if retailers want to turn random customers into loyal, regular ones.