Updated: May 13, 2019
Credit from Dan Blacharski
Retailers who refuse to place e-commerce on an equal footing to brick-and-mortar are at risk of becoming obsolete. Dan Blacharski takes a deep dive into the myth of the retail apocalypse, and how retailers must adapt to survive.
Retailers are facing major pressure points: An increasing shift towards e-commerce and feature-rich virtual sites, a need to change the distribution chain to accommodate quick and readily-available last-mile delivery, and shifting demands from millennial consumers who demand that all retailers, even smaller ones, offer these sophisticated options.
The first major shift is towards e-commerce; those retailers large and small who have refused to place e-commerce on equal footing to brick-and-mortar have failed and will continue to do so. But to blame Amazon, or “the Internet” on the failing of brick-and-mortar shops is simplistic.
While some have positioned these changes as a “retail apocalypse” and have laid blame at the feet of Amazon, that analysis is off the mark. In reality, it’s less of an apocalypse and more of a shift, and complain though we may, these dramatic changes are necessary, they better serve the customer, and ultimately, will drive growth and profit for retailers who demonstrate an ability to adapt to retail’s new normal. More importantly, in today’s era of the primacy of e-commerce, the technology platforms and delivery networks which underlie both physical and virtual retail shops are playing just as great a role as the retailers themselves. When you look under the hood, the industry isn’t being led by the familiar retail giants that dominate strip malls throughout the nation, it’s being led by platform providers whose names you might not recognize – but who are fundamentally altering the way retail works.
It’s what’s behind the scenes that makes it happen
The underlying technology plays a big role in e-retail success, especially with the surge of useful enabling platforms that handle everything from last-mile delivery, to finding a market for your goods.
In fact, a major trend in retail is to abandon brick-and-mortar completely, with completely online stores. This can be as complex as what have come to be known as “dark stores,” which exist as a fulfillment center only, and not for walk-in traffic; or as simple as drop-shipping platforms like Oberlo that allows smaller retailers to market, resell and transparently ship goods from multiple verified original wholesalers from a common platform that includes facilities for building a store and populating it with products, taking orders, marketing and shipping. Still other platforms like Tyme Commerce create a B2B marketplace, allowing smaller retailers in the food service business to gain access to a much larger audience. But availability of goods is meaningless unless there is an easy way to get it to the customer, and Point Pickup does so with a platform and delivery network that is scalable enough to accommodate all types and sizes of retailers, from the local to the enterprise level in both major and secondary markets.
All three are abstracted from the customer. “Our marketplace solves two problems,” said Bobby Marhamat, CEO of Tyme Commerce. “First, restaurants wanting to provide specialty items that they don’t make in-house will now have a ready-made marketplace that goes beyond the standard offerings of large restaurant suppliers. Second, smaller providers offering unique items such as specialty desserts and baked goods have often faced an uphill battle in finding a market. With our marketplace, these smaller specialty providers will have a ready-made platform for sales and expansion.”
“The key to retail success is great distribution and delivery,” said Tom Fiorita, CEO of Point Pickup. “Many of the same-day delivery platforms, however, work on a basic Uber model of finding the closest driver, but that doesn’t meet the needs of the e-commerce market. A multimodal approach that matches each shipment to not only the closest, but to the most appropriate vehicle and driver is essential.”
Marketing to the shift
Retailers, especially in the grocery segment, have always paid attention to the “impulse buy” and have been resistant to move aggressively to online models, fearing that the average cart size would diminish. Those who have embraced the change however, have been surprised to find that in fact, online purchasing has far exceeded expectations.
Grocery marketers understand that by putting attractive items on end caps and checkout lanes, they increase the average cart size. That’s why you find cheap cigars, candy bars and chewing gum by the checkout. Not only has that impulse buy not been lost in the online retail world, but it has also been enhanced by those retailers who are savvy enough to market to the shift.
The underlying technology platforms, last-mile delivery, and greater availability of goods through innovations such as digital drop-shipping and B2B marketplaces aren’t just making online shopping “as good as” a trip to the store, they are making it better. Retail marketing will shift alongside these changes to attract customers interested in more options, greater selection, ease of buying and fast delivery.
All retailers have to get on board
The logistics behind the retail shift may sound overwhelming, but behind-the-scenes platforms are making it easier for retailers of all sizes. Last-mile delivery platforms like Point Pickup, drop-shipping platforms like Oberlo, and B2B marketplaces like Tyme Commerce are behind an impending boom in retail – for those retailers who are willing to take advantage of the enabling platforms.