The next 5 years in retail?
Yesterday I attended an event in FIT (Fashion Institute of Technology) here in New York City, organized by my good friend Michael B. Reidbord, the founder of FTC (Fashion Tech Consortium) Talking about Connecting the Innovation Economy with Fashion and Commerce. There were four companies presenting:
- One was Ahmed Beshry, also a good friend of mine and Co-Founder and CTO of QueueHop — Makes you check out without standing in line.
- Michael Wang and Roxanne Hersh, Co-Founder, CEO, and Retail Business Development manager from Sirl.io — Indoor digital mapping and product search technology.
- Jenny Tcharnaia from TriMirror — 3D virtual fitting technology.
- Mystor-E — Smart store display platform.
What I found interesting is that 3 out of 4 of these companies are focused on “saving” offline retail experience while the trend seems to be that everything we don’t need within 24 hours will be ordered online. So let’s look into that.
“While I do believe and understand that some people like the offline shopping experience, I have a harder time figuring out just how they’ll survive.”
There are two big problems:
- People don’t enjoy the experience of shopping, looking and not finding what they need, long lines, badly informed staff, annoying check out procedures…
- Real-Estate prices are and will keep going up to levels where it is not profitable for stores to keep their inner city locations open.
The first problem can be solved by innovating and training. Things like QueueHop, Sirl and Mystor-E are well on their way to improve the shopping and checkout experience and possibly get people to go back to stores. While the second problem is already happening with stores paying more than they’ll ever make in that store just to keep their brand on the streets. I believe that eventually, this will be unsustainable especially for smaller brands, and retail spaces will naturally decrease.
Matt B. Britton, The CEO of CrowdTap also talked about this in a video I shot on Propelify 2017. He mentioned that shops that focus on things you need on the spot will stay because we don’t want to order our coffee 24 hours in advance. While everything else will be ordered online. He also noticed that brands need to choose between Value or Exclusiveness. Brands in the middle will not make it anywhere. Look at Walmart that’s in a race to the bottom to get the lowest prices possible vs. Tesla who makes 90,000 USD cars and is now the most valuable car manufacturer in the US while producing a fraction of the number of cars then let’s say Ford is producing.
I know I’m not an expert, not at retail and not at anything else really, all I want to do is share with you what I think the future will look like. I would love to hear your thoughts on this subject.
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