How Technology Is Transforming Retail
Across the retail landscape, a war is going on, and the battles are being fought on multiple fronts: business models, channels, brands, customers, technologies, and more. Some of these are old scores reignited by new protagonists armed with new weapons, but quite a few are new clashes.
When it comes to business models, structural barriers are coming down, empowering everyone to disrupt each other’s businesses. Postal services are becoming fulfilment platforms, taxis are delivering parcels and food, recipe box companies are eating the lunch of restaurants and grocery retailers, and so on.
This is having a knock-on effect on traditional retail brands that are struggling to compete in the new world order. Now anyone with a great product and access to an online fulfilment or marketplace platform can use social media and word of mouth to bootstrap an overnight customer community that traditional brands once would have taken years to build.
The big retailers are getting squeezed and disintermediated at both ends. Upstream, product brands are battling with the new entrants and fighting with retailers for greater margin share, while trying to build direct relationships and communities with their end customers.
Downstream, traditional retailers, with their millstone of physical stores, are fighting with their pure-play online counterparts, while facing new threats such as subscription services and smart appliances that can replenish themselves directly from manufacturers.
It’s anyone’s guess at this point who will win the battle for the smart home voice hub, but whoever it is, it won’t be a traditional retailer. The winner will own the customer relationship and their data, potentially enabling them to intercept the flow of the value chain. These smart voice-enabled hubs that link all the technology and appliances in a home are the opening move in a new battle for the first mile – the portion of the retail chain that covers everything from the consumer’s premises to the outside world.
On another battlefront, four technology tidal waves are gathering momentum, ready to wash over us: artificial intelligence (AI), robotics, big data, and the Internet of Things (IoT). Where they collide with each other and with us, they are going create a boom of new opportunities and industries, along with the disruption of existing ones