The growth of online retail sales, fast outpacing the growth of brick-and-mortar sales, has many enigmas whether the future of retail resides online. Online retail sales to consumers in the U.S. crossed $453 billion in 2017 by the U.S. Commerce Department’s measure, a 16.0% jump compared with 2016. That’s the biggest jump since 2010. This means e-commerce now accounts for 13% of total retail sales.
However, Ecommerce is not to blame for the ‘death of retail, because retail is not dead or dying.
The retail climate is indeed changing but in fact physical retail is still growing and, more notably, that e-commerce represents ONLY about 13% of all retail. It is true that physical stores account for roughly 87% of all retail sales.
Admittedly the “Amazon Effect” has been a driving force behind the massive disruption in the way we shop. But wait. Who said Amazon was just for E-commerce anyway? Amazon’s purchase of Whole Foods gives it a much more comprehensive distribution footprint, which will help it increase the efficiency of its online model.
Amazon is getting more competitive in physical retail after it opened doors to its stores:
Amazon Books bookstores
Amazon Go convenience stores
Amazon Pop-up Kiosks
AmazonFresh Pickup grocery locations
Amazon Whole Foods stores
Amazon college pickup and return centers
A number of successful online retailers are becoming increasingly focused on the physical world, for a number of reasons.
Episerver Senior Director of Commerce, Ed Kennedy comments:
“It makes complete sense for online-only retailers to have physical locations. Physical retail still has several advantages over online including convenience, speed to consumption and tangible product experiences. Online retailers such as Amazon and Warby Parker opening physical stores may eat into their profitability but they gain brand and market presence that can increase sales both online and in-store. Furthermore, physical stores give online retailers a collection and distribution point for online purchases, which provides a convenient service for consumers and helps control continuously rising shipping costs.
Moving to physical locations that complement the Web experience shows that these brands are willing to invest in the customer experience, which sets them apart from those not accounting for shoppers’ diverse expectations and needs. In the same breath, however, it’s important for digital-first retailers to understand that when they open their physical doors to shoppers, their online crowd will expect a technology-driven experience. “
PHYSICAL RETAIL IS NOT DEAD — WHAT’S DEAD IS BORING RETAIL
Harvard Business Review points out that the impetus to evolve is not killing retail, rather it’s the inability of some companies to adapt to a new model. Today’s retail is in the process of being reinvented once again. It has a need for innovations. Amazon gives a great example on how to do it: no checkout counters, no queues, no shoplifting. The concept of self-checkout isn’t new, but Amazon has definitely breathed a new life, introducing Amazon Go Store.
As online and offline fuse, we may soon find that our digital track follows us in physical stores — with the extensive use of beacons and facial recognition systems. Such technologies as In-store drones that will locate and deliver goods to customers within the store, robotic AI-powered shop assistants, holographic representation of goods, and many more are already reshaping retail and it’s no longer a science fiction.
Such Retail giants as Walmart, Carrefour, JD.COM go for Blockchainization because they care about the origins of their products, the supply chain, communications between parties and consumer’s needs.
OSA DC STANDS FOR INNOVATIONS IN RETAIL
For an industry that continues to grow online and benefits from the digitized economy, the retail industry will need help streamlining and optimizing product services before they can reach their full potential.
OSA DC’s artificial intelligence and machine learning protocols will solve many of the problems faced by outlets that use current logistics systems while blockchain will work in tandem with its AI to facilitate a more efficient environment for seller and consumer alike.
Together, AI and blockchain will foster a frictionless system. Provider, retailer, and consumer will coexist in an environment that encourages cooperation between each party at each stage of product circulation. Providers and retailers will have access to customer data and purchasing trends that will allow them to make more effective business decisions, and consumers will shop for goods backed by the certainty and integrity blockchain brings to product information. Besides that OSA DC develops the existing solution with image recognition models and a comprehensive product master data catalogue.
OSA DC imagines a future where the technological innovations of today become the enterprise solutions of tomorrow.
In fact, many retailers are heralding a new retail ecosystem. Clearly, traditional retailers are here to stay as there is always a room for a variety of models to meet the ever-changing consumer.
