I’ll Have What They’re Having
In a retail environment where Amazon dominates the majority of the news headlines and captures 53% of market growth in 2016, you’d think that retailers and brands would take notice and follow the Amazon playbook.
But they aren’t.
Retailers insist on playing the copy game, placing order after order of what worked in the past and whatever their “peers” are using.
We’re in a new world people, it’s time to watch and learn from the best, not the middling.
From what we see, there are two very critical mistakes that the average bricks-born ( merchants who started as physical retailers ) merchant is currently making.
1 — They’re not *truly* investing in innovation. Most retailers are buying off the shelf technology that they’ve heard their peers might be using, slapping a coat of lipstick on it, and calling the process innovative.
2 — Most bricks-born retailers have less than 15% of their business coming from digital channels and so they use this an excuse to invest less than 15% of their budget into digital channels.
*Combine these two mistakes and you have a guaranteed formula to not do well in an Amazon-first world.*
There are days where I scratch my head, astounded by the choices that are being made by these retailers.
Yet more and more I’m finding myself elated by what is transpiring in the world of commerce.
On days where I’m confused, it tends to be the results of a conversation with a traditional retailer ( often a $100M+ company ) who are looking to make a “big” investment in eCommerce…their number, $100,000.
Nope, you didn’t read that wrong.
When I’m elated, it’s because I’ve had a conversation with a digital-born merchant that’s going from 0 to multiple millions in sales by attacking specialized, niche markets, staying focused and customizing technology to suit those exact needs. There are hundreds of thousands of these companies attacking bricks-born merchants from the bottom and with Amazon pressuring from above, it’s forcing the non-innovators out of business.
For those that want a concrete example, here it is. Just last week I was speaking with a massive retailer, demonstrating to them how Shopify Plus was a great option to power a key component in their digital roadmap for the next few years. How was this recommendation received? “No way, they couldn’t possibly handle us. None of our competitors use them so clearly it wouldn’t work.”
Ego and lack of foresight, welcome to the party. This particular retailer would not even consider a solution that we demonstrably demonstrated would work wonders for them. Instead, they’re going to pay for a much larger, far more expensive, less innovative platform. Oh, and it’ll take them 1–2 years to implement. All for the sole reason that it’s what their competitors were doing.
Reminds me of the old saying, you never get fired for choosing IBM…well people are going to start getting fired for these kinds of choices.
All that being said, I’ve never been so excited to be in retail. This is a once in a lifetime opportunity to witness an entire industry shift and change, like having a front row seat to watch the dinosaurs go extinct — I’m thrilled to be a part of it.
I sincerely hope more merchants wake up before it is too late. I grew up in a retail family and I very much want to see a vibrant, diverse, sustainable retail economy for years to come. If we can get past the “me too” mentality and the ego driven decision making, we’ll all be much better off.
Some brands and retailers are waking up and not just following their brothers and sisters off the proverbial cliff, some are realizing they can think for themselves and make better, different decisions, some are checking their egos at the door and realizing they are just as vulnerable now as when their companies were startups themselves.
But not enough. You see it in the news. More and more bricks-born retailers are closing their doors permanently. You can try and pick apart the finer details as to why each merchant is shutting down, but the reality of it all is that most are just not equipped for retail in 2017 and beyond.