Mark Twain was a rock star of the late 19thcentury. Unlike today where any star can be continually tracked through technology, people didn’t have the same access to their idols. As he aged and infrequently spotted in public, gossip swirled that Twain had died. He famously remarked, “The rumors of my death are greatly exaggerated.”
Rumors of retailing’s demise continue to be greatly exaggerated as well. Amazon, the great bricks-and-mortar slayer, just reported sales and earnings on Thu. Sales grew 20% in the 4thquarter of 2013 but earnings were less than 1% on sales. The market punished the stock by sending it down 7% overnight because they aren’t making much money with their business model.
The world’s largest furniture retailer sees their future in-store. Though IKEA started as a mail-order company, had 10 million new app downloads last year and saw online sales grow 20%, chief executive Peter Agnefjall says, “I think that in 2020 the absolute majority of sales will still be in our stores.” http://lnkd.in/drYKMCC.
People still want to touch, feel, smell, taste and more fully experience many products before they buy. Shoppers buy more when they can engage more of their senses. That’s why the best retailers see that it makes sense to engage and enthrall shoppers, something that cannot be completely accomplished online.
By 2020, new retail formats and technologies will emerge. Many retailers of today will perish by then, especially those that fail to choose the right merchandise, the right messages and the right ways to deliver them to an evolving consumer landscape. I predict without fear that that new landscape will include many great new retail stores.