Earlier this summer, I got really annoyed when Jerry Storch, CEO of HBC (parent company to The Bay) stood up in front of a captive audience at The Retail Council Of Canada’s STORE Conference and delivered some controversial remarks about the state of online and offline commerce.
Instead of speaking on the current trends in retail, like the rise of omni-channel and the importance of ecommerce, Storch presented the notion that ecommerce doesn’t matter. Apparently, you can’t make any money online.
From the Financial Post recap of this talk:
“It all comes down to simple economics: It’s much cheaper for consumers to serve as the end of the retail supply chain by buying a product at a bricks-and-mortar store rather than having a retailer shoulder the burden, even if that retailer does not have the overhead costs of a store.”
But wait, it gets better:
“So why are Internet retailers such as Amazon trying to charge consumers less than bricks-and-mortar retailers for goods? It’s because they are not making any money […] Quarter after quarter, Amazon makes no money on the sale of physical goods.”
Jeepers. I wonder if Amazon knows they aren’t making any money. Maybe someone should tell them?
To my amazement, Storch isn’t the only big-wig spouting this kind of advice unto eager retailer ears: Heather Reisman of Indigo has recently gone on the record to state that we are on the cusp of a ‘retail renaissance’ for bricks-and-mortar. In stark contrast to Storch’s position of bricks-and-mortar is the be-all end-all, Reisman says that retail is changing from large footprint big-box style stores to smaller stores with a higher emphasis on creating an experience for Indigo’s in-store customers (with the hopes of fostering community and, of course, more impulse buys). Bruce Winder, a Toronto-based retail consultant, sums in up aptly:
People can pick up a book online if they want to, but they still want to go somewhere for an experience and have some community with people.
I tend to agree a great deal more with Reisman’s and Winder’s assessment of the rapidly evolving retail industry, but I’d like to push the idea that we’re experiencing a ‘retail renaissance’ even further: I believe we are undergoing a full-blown paradigmatic shift in the retail world.
It’s not that bricks-and-mortar stores are going to have new life breathed into them all of a sudden. Authors like Doug Stephens of the Retail Prophet make this clear: the days of big-box mediocrity are over for good. We’re entering a completely new era of what retail means altogether. It’s a unified experience for online and in-store, it’s engendering emotions and passion in your customer base, it’s less square footage for your store but more experience per square inch. It’s finding a unique niche and owning it outright if you want to survive this shift in how people buy.
It’s less square footage for your store but more experience per square inch.
So take a back seat, Jerry Storch. Push it a little further, Heather Reisman and Bruce Winder. We’re not living in the golden age of bricks-and-mortar anymore, so you can’t go applying terms like ‘renaissance’ which give speak to resurgence and revival. Retail as we know it is dead. CEOs who can afford to stand on their soapboxes of wealth and power touting that bricks-and-mortar is somehow a better investment over ecommerce to impressionable small to medium sized retailers is irresponsible. Let’s encourage more amazing niche businesses to start off on solid footings by realizing the future of retail instead of hoping for the past to somehow loop back: let’s build an experiential-focused omni-channel future together.