As the decade ends, it would be useful to reflect on how the retail industry has changed since 2010. With the wisdom of hindsight, we can now say what trends were rightfully chased and what claims were distractions that proved counterproductive.
Two things rightfully received a lot of attention:
- Retail has changed tremendously. At every retail conference in the last decade, at least one speaker would recite some variant of this sentence: "Retail will change more in the next decade than ever before." (My conservative estimate would have it said 10,000 times since 2010.) The upshot? Traditional indoor malls just aren't as important as they were 30 years ago, and physical retail that still exists is often about services like medical offices, fitness studios, and restaurants. Nearly 20% of retail is now online, and most companies, fortunately, got on the e-commerce train years ago. Those companies are seeing a good amount of revenue from e-commerce (grocery excepted, I discuss below), but the next big retail challenges are rightsizing store footprints and building brands that last in a highly fragmented, flash-in-the-pan world.
- Omnichannel is important. Actually, omni (specifically inventory visibility and flexibility across channels) is more than important -- it is an inevitable cost of doing business. While retailers have historically been pretty terrible at managing inventory (to their defense, it's tough to know where something is in a store when customers touch and move merchandise), winners from the last decade like Best Buy and Target have used their stores as warehouses, and enabled click and collect which has been the biggest unlock for national chains since the UPC code. But omnichannel excellence is a journey, not a destination, and most retailers still aren't good at it. Just you watch: we'll keep talking about this through 2030.
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