Source: Amazon Go video
RetailWire’s top five discussions of 2016 – What will top the list in 2017?
As the new year begins, we thought it would be instructive to identify the five RetailWire discussions that received the most expert comments in 2016 before discussing what’s in store for 2017.
Unsurprisingly, the most commented-on discussion (43 comments) was about the Amazon Go convenience store concept, which included the following from Dechert-Hampe’s Ben Ball: “Always remember Jeff Bezos’ Gold Rule: Automate every possible process — invest expensive human capital in only the most complex tasks. And remember the implied ‘Rule #2’ of the Amazon business model — only seek profitability after superior consumer experience yields scale. … I never count Bezos out.”
Number two on the most-discussed list (36 comments) was a piece on whether brick and mortar stores are ready to leverage in-store shopper data. Here’s what Peter Fader of the Wharton School wrote: “[Retailers] can’t properly leverage their transaction log data, so forget about in-store shopper data. Retailers need to walk before they run: first figure out who’s buying what before you worry about who’s doing what. Given the disappointingly slow progress on the former, I’m not holding my breath for the latter. But I hope I can be proven wrong in the next few years.”
A discussion on whether a higher minimum wage would raise service levels sparked a healthy debate (35 comments). Mark Ryski of HeadCount offered this: “A higher minimum wage will not guarantee better service, and so consumer skepticism is understandable. However, I believe that an increase in the minimum wage will enable employers to expect more from their employees, including delivering a better in-store experience.”
Number four on the list (35 comments) asked whether Amazon would roll out its bookstore concept across the country. SAP’s Mohamed Amer had this observation: “It is abundantly clear that customers don’t live in singularly physical or digital realms. Shopping cuts across all points of interactions with memorable experiences setting the bar for customer expectations. Amazon must move from selling goods and providing great customer service to selling experiences that transcend 20th century retail boundaries.”
The fifth most-discussed story (33 comments) on the site was whether Donald Trump’s election would have a positive or negative effect on retailing. Like the nation itself, opinions were split and closely held by those making them.
- Will the tech behind Amazon Go redefine convenience at retail? (43 expert comments) – RetailWire
- Is brick and mortar ready to leverage in-store shopper data? (36 expert comments) – RetailWire
- Will a higher minimum wage translate to better service levels? (35 expert comments) – RetailWire
- Is Amazon planning a big bookstore rollout? (35 expert comments) – RetailWire
- Will Donald Trump’s presidency be good for retailers? (33 expert comments) – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: What do you think were the most important retail topics of 2016? How do you think that list will change in 2017?
Poll
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
Ken Morris
Managing Partner Cambridge Retail Advisors
None of the top five topics surprise me. None of the topics discussed a merger of stores or a closing of stores. That’s daily news. All of these topics have longer-term impact on the industry.
Two areas of discussion will rise to the top in 2017. The first will be Amazon.com. They are moving fast and in a direction that will impact retail and business more than any other company. The second will be how AI (artificial intelligence) uses data to enhance the customer experience and support stronger retail sales (just two of the many ways AI will impact business positively).
Congratulations to RetailWire for advancing conversations around some of the most exciting and transformative topics of 2016 (and I agree with the list included in George’s summation). I have no doubt that potential discussion questions during 2017 will be equally robust.
Here are a few that I believe will create a flurry of activity throughout the year: 1.) President Trump and his cabinet’s effect on retail, healthcare and taxes; 2.) retail consolidation, closures and globalization; 3.) consumerism — especially as it relates to path to purchase, health and wellness and social media; 4.) augmented reality, self-driving cars, drones and gamification; and 5.) Amazon (this topic alone will generate countless topics).
I think the most important topic of 2016 was Amazon versus the retail industry — not only did Amazon completely dominate online commerce, but it forced the entire industry to up their online game. And if this wasn’t enough, Amazon publicized numerous futuristic initiatives like Amazon Go, drone delivery and Urban Airship.
In 2017, I believe Amazon will continue to dominate the narrative as they continue to push the bounds and invent new ways to retail. For the rest of the brick-and-mortar retail industry, online and omnichannel will continue to dominate. Half-baked BOPIS or a flashier mobile site won’t be enough. A failed online strategy represents existential risk. Lastly, store traffic and conversion. The nature and intent of store visitation is changing. Retailers need to treat their store traffic like a precious, non-renewable resource. Today, many retailers don’t even track traffic in their stores, but use transactions as a proxy. These retailers are flying blind in a perilous competitive environment.
I think Amazon will once again top RetailWire’s discussions. The company continues to gobble market share through innovation and a relentless desire to grow. Amazon is now present in all retail formats: brick-and-mortar, digital and mobile. It owns e-commerce and is expanding into content and product manufacturing. Finally, it leads all retailers in logistics. One way or the other, Amazon will appear in most of our 2017 discussions.
The number of comments is certainly a good indicator of the relevance and impact of the topic for retailers. The five stories here represent what was on the mind of retailers in 2016 and Amazon was in the thick of it.
For 2017, I expect top stories to take us further in executing the realities of the ongoing digital shift in the economy as we see disruptions in how value is created in retailing. My top five headlines will take on the following themes: 1.) Walmart and Amazon dominating the industry with their deep R&D pockets and willingness to make IT investments; 2.) Labor content in stores shifting to more customer-facing activities as in-store processes get reinvented by the help of IoT technology; 3.) A renaissance of visual merchandising as storytelling across all points of customer interactions; 4.) The use of artificial intelligence (AI), and specifically augmented reality (AR), to enhance the customer experience as well as the infusion of AI and machine learning into retail applications; and 5.) significantly more retailers using their massive data — structured, unstructured, historical and real-time — in the moment to deliver context-aware, relevant and personalized customer communications and offers across all interaction points.
Exciting times ahead!
Retail wrestled with viability and profitability during 2016 and the challenge of change management was central as the empowered consumer was the foundation for engagement and business strategy. The omnichannel implementation will continue to dominate the 2017 retail conversation and the digital strategy will escalate in importance as it connects customer experience with corporate valuation and branding goals. Discussions on how to increase the productivity of places, processes and people will be paramount as costs and competition increase.
Of course, Amazon was and continues to be the major disruptor for retail. To start off 2017, just as major retailers are shuttering stores, Amazon is opening them. I think we will also see a major shift in technology investments for 2017. More opportunities for automation in-store and in the back office will drive labor expenses down further as the minimum wage debates continue.
Yes, Amazon will continue to dominate retail and the conversation and you can bet your booty that I will continue to be the curmudgeon yelling, “where’s the beef?!” Sorry folks, I love to see what Amazon is up to but I hate that they get accolades while any other retailer who did the same and still couldn’t make a profit would be booed out of business. Is that where retail is supposed to be heading? Spend your money on lots of cool stuff, give shipping away for free and even offer same-day delivery but be sure you have another business on the side to support you.
Ding me if you must but that’s my 2 cents.
The most important retail topics for 2016 were things that were disruptive — disruptive technology and disruptive retailer moves (acquisitions, store closings or extending into new markets, categories or commerce formats). The same will hold true for 2017. We can predict some of the disruptive technologies, but we can’t really predict the retailer moves.
From a disruptive technology perspective, I think most of the technologies will relate to mobility. Retailers are scrambling to keep up with consumers’ thirst for more and better mobile capabilities. Look for new innovative ways that vendors and retailers will enhance the shopping and buying experience with artificial-intelligence, voice commands, customer identification, mobile ordering, mobile payments, etc. Moving more of the retail process, technology and staffing to the the consumer by leveraging the phone as a guided selling tool, a wallet, a cash register and essentially a store associate. Why invest in robots when you have customers?
Here are the topics for 2017: AMAZON, AMAZON, AMAZON. Their stated goal is “to be Earth’s most customer-centric company … ” This implies global domination, and I believe they are fully on the path to achieving this. The only real threat to Amazon’s future is Alibaba.
I just read JCP decomped in Holiday. Anyone else see that? The number one topic must always be “the state of the shopper.”
Folks, beware of the bright shiny object. The department/specialty store retail bubble is collapsing. Tens of thousands of fellow retailers will be out of work in a month. Of course, not all locations or brands are performing similarly. Sure the Amazon stats are stunning and all need to react it along with all things digital. But the change, the reaction must be based upon what the shopper wants. Several of the under performing retailers invested significantly in tech driven tactics: loyalty programs, beacons, et al. Did those investments prevent an even lower decomp or will they only further diminish profit?
There needs to be more discussion around the details of shifting shopper behavior and the implications to retail. Retail can only be as good as it can surprise and delight its shoppers.
This is a really tough question and it has taken me way too long to wrestle my thoughts on it — but here goes.
First, Amazon is part of the equation for sure. But just saying “Amazon” seems too generic. (Starting to sound a bit generic, like “Borked” which we may well hear again this year. Though the thought of saying one has been “Amazoned” is intriguing. “What happened to Sears?”
“They got Amazoned!”
Hmmm…..
But my bet will go on the IoT. I think we will be talking more about how we interact with Amazon (or other digitally connected retailers who can outfox them on this one) than about the company itself. Consider that the primary competitive strength of Amazon is that it has provided the easiest and most user-friendly access to online retail for consumers — much like AOL provided the entry level access to the internet that many of us needed to catch on. What might disrupt that? Well, perhaps if my new washing machine is hard-wired to automatically order Tide from P&G directly, rather than my having to push a DASH button or whisper sweet nothings to Alexa about my shopping list, maybe then I wouldn’t care if it was coming from Amazon or not. I’m not sure that incremental convenience will trump Prime discounts, rewards and free shipping. But it might. At least, for some of the people some of the time?
Just one (probably lame) example of things to come in 2017.
As always, the most important “retail” topics were general issues of the economy. Will interest rates remain near zero? Will incomes for “everyone else” (finally) pick up and who will benefit? Will the internet sales tax exemption continue? These aren’t retail per se, but enormously affect it. And so it will be this year.
More directly retail topics we’ll talk about are likely to be:
and, of course
Unquestionably store closures. It’s already started, but we’re going to shrink physical retail this year by a much bigger number than people realize.
The next big step in the retail sector in 2017 is going to be without a doubt, the role of IoT. Enterprise IoT is being adapted to the retail business model to help improve the security and operational efficiency of the retail industry.
The combination of smart sensors with managed services is going to lead the retail sector towards an increase in overall revenue and a drastic decrease in their losses.