Retailing Apocalypse.

The world of retailing is changing faster than you can blink your eyes. Many agree that 2017 was arguably the most significant year of disruption and destruction in the history of retailing. The idea of a retailing apocalypse is probably a little over-dramatic, but powerful changes are happening quickly. There are more than 900 industries in the $18 trillion U.S. economy, and more than 80% of them are going through significant changes. Retailing is on the brutal frontline of massive changes that will reshape the way we consume goods and services in this Brave New World. Hold onto your hats and iPhones.   

There are more than 1,200 shopping malls in America and we are super-consumers: Americans spend almost $5 trillion a year across more than 30 categories of retail, from automobiles to women’s shoes, iPhones to eye glasses, pharmacy items to toys for our children. There are more than 750,000 retailers of all shapes and sizes across the current landscape, and the current winners in retailing are Costco, Wal-Mart, Best Buy and Home Depot. That will change. According to research firm, eMarketer, e-commerce sales grew 16% to $453 billion in 2017. Amazon's sales last year were up 32% - and they have now captured 44% of all e-commerce sales. Not bad for a small, little unknown start-up that was only selling books in 1995. Amazon is well-positioned for 2018; more than 50% of American households are now Amazon Prime Members. Specialty retailers that work hard to offer a superior customer experience like Apple, Nordstrom, Ulta and others are holding their own. Luxury retailers are doing relatively well and having to quickly learn the new rules of selling luxury brands and experiences, with the leading online luxury retailers like Yoox Net-a-Porter (better known at YNAP) and Farfetch reshaping the luxury retail markets faster than you can sip a double chai-latte with an extra shot of expresso. Historic retailers like Radio Shack, Sears, JC Penny, Toys R Us, Kmart, and so many others are closing thousands of stores and going bankrupt. Iconic American retailing names are evaporating from the map.

America currently has 40% more retail shopping space per retail $ than Canada and 900% more than Germany. For the last 30 years, America has built shopping malls at twice the pace of American population growth. Americans are serious recreational shoppers; we consume stuff faster than any society in the 10,000 years of recorded human history. Disequilibrium and the “Amazon Effect” are going to shake up the world of retailing in 2018 more than ever. Free enterprise and changing market dynamics can be so cruel.      

I have enjoyed remarkable retail shopping experiences at the West Edmonton Mall in Edmonton, Canada, The Mall of America in Minneapolis, The Eaton Center in Toronto, and the Super Brand Mall in Shanghai. I have visited and observed brilliant retailing environments on Rodeo Drive in Beverly Hills, The Magnificent Mile in Chicago, and the iconic FAO Schwarz toy store in New York City, 30 days before it closed its doors forever. It was replaced with a shiny new Apple Store. I have toured a couple hundred large, regional malls in Seattle and Honolulu, Los Angeles and Boston, and many places in between. They are all mostly the same. Powerful memories: I vividly remember being a young kid growing up in Canada, saving my money from cutting grass and doing odd jobs in the neighborhood, and riding my bike to the local Kmart and making my first purchase without my parent’s knowledge: An 8-track cassette tape of the timeless American rock band, Kiss: Rock and Roll Over; $11. A good decision, without doubt, even 40 years later. I also remember frequently riding my bike to the store called Consumers, where you would stand at one of several long counters and review catalogues of retail goods, make a selection, write the product numbers on a simple order form, then take it to the counter to review and finalize with the friendly retail clerk. I would save my money and transport it in a sealed, plastic sandwich bag. After selecting my order, I would pull out my money bag, pay, and then wait about 3-4 weeks for the order to come into that store. A nice lady at Consumers would attempt to call you when the order arrived. This was often difficult to connect and get the message; it was before the remarkable invention of a telephone recording machine to capture calls when you weren’t home. That innovation changed the retailing industry quite a bit. A few years ago I had a flashback to those wonderful, early days of participating in the retail experience. The memory was triggered late on a snowy, cold Friday night when I was comfortably resting in bed shopping for a new snow blower on Amazon. Denver Weather reports had another apocalyptic Colorado blizzard coming soon. I was simultaneously listening to Journey’s Greatest Hits on my iPhone and reading reviews on the different brands and options, and comparing prices. I easily made a decision and hit the purchase button; a beautiful, $1,100 Husqvarna arrived at my home about 5 days later. I didn’t need to wait for the phone call from the nice lady at Consumers.       

On a quiet and calm evening recently, I walked the tiny town square in Bentonville, Arkansas and visited Sam Walton’s Five and Dime, the original Wal-Mart store started back in 1950. The small store is now an impressive Wal-Mart Museum, and you can take a picture standing next to Sam’s famous 1979 Ford F150 pickup truck. The world has changed dramatically. The rate of disruption in the world of retailing is accelerating, and new thinking and strategies on creating and delivering superior customer experiences requires the best leadership and teamwork. What worked 3 years ago won’t work this year. The strongest, swiftest and most capable will adapt and thrive. I still enjoy listening to Kiss’ Rock and Roll Over on my iPhone playlist - and often go back in my mind to that day almost 40 years ago - when I bought that great music on the 8-track cassette before the Kmart store closed for the evening. I vividly remember pulling out my small bag of money and carefully counting every dollar and coin. That is a good memory.       

Let's Create More Sparks: Robert is a curious Irish-Canadian and well-traveled American who naturally enjoys story telling that includes lots of interesting facts and figures. Stats and data points help tell powerful stories. Interesting quotes and good books bring vivid colors and memorable shapes to a story. Good stories inspire the human spirit. Ideally you found an idea or two in this LinkedIn article that you can now use as a fantastic conversation starter with friends or colleagues over a good cup of coffee on a leisurely Saturday afternoon.