2018 has been the year of retail closures and brick and mortar stores seeing losses like never before. However, tech might be the saving grace for owners
Christmas has traditionally held special significance for retailers. Though some say the end-of-the-year bump is overstated, the period that begins with Black Friday and ends with the advent of January nonetheless represents an opportunity for those in the sector to make a final push for sales before the year is out.
Needless to say that in a challenging retail landscape, this significance is amplified. It’s no secret that the sector is in a state of major transition, produced in part by developments in tech and changing consumer behaviour and the collapse of Toys R Us into administration proved that even major established brands were not immune to change. There will doubtless be retailers hoping that a strong performance at the end of the year will ease their woes and alleviate pressure but this is to put a plaster on a broken leg. There’s a lesson we can all take from the retail apocalypse: embrace technology because it’s here to stay.
It’s a lesson that has relevance far beyond the confines of the retail sector. Digital transformation is vitally important to almost every industry and company – large or small. The investment of time and money required to undergo this transformation might be considerable but in the long run it will generate returns that make such costs negligible. What’s more, when the alternative could be total commercial failure, it’s not a question of if but when.
More important is to understand that embracing technology isn’t a one-time deal. A business must change as the technology it uses or should use evolves or comes into being. This requires a change in mindset and a business model geared towards constant adaptation. The most innovative companies are constantly exploring and experimenting with new or developing technologies such as blockchain and big data. They’re already thinking about the potential of 5G, which will be a hundred times faster than its fourth-generation counterpart.
But for smaller companies lagging behind others in terms of their level of digitalisation, the transformation should focus on making internal processes more efficient and bringing about a more enjoyable and engaging experience for their customers. With the time saved, they can build on this and look for ways that tech can be used in other areas – marketing, for instance or bookkeeping – until it becomes habitual to explore newly available technologies and see how they might improve their business.
There’s an idea that e-commerce appeared out of nowhere and took unsuspecting retail businesses by surprise. But that wasn’t the case. E-commerce sales were rising for years beforehand and retailers failed to act. At the heart of this is one of the most important reasons that businesses should embrace technology – access to information. Companies that invest in data, research and analysis can learn more about what their customers want and expect from them and take action accordingly. The alternative is to be replaced by new, disruptive companies that put tech at the top of their agenda from the off.
In 1995, the author Clifford Stoll claimed in Silicon Snake Oil that the prospect of e-commerce was “baloney” and in an accompanying article in Newsweek, he said: “No online database will replace your daily newspaper. No cd-rom can take the place of a competent teacher. No computer network will change the way government works.” Needless to say, Mr. Stoll was hopelessly off the mark.
What we can learn from his error and the struggles facing the retail sector, is that it’s easy to underestimate the potential of technology and easier still to under-appreciate the importance of embracing it. And entrepreneurs and business owners in all industries should bear this in mind.