A Call to Action
How prepared are today's retailers for the changes ahead and, in particular, the pace of change that technology is driving? In our experience, too many of those who began their careers operating stores are still trying to squeeze more from their traditional business processes rather than responding to the new world in entirely new ways. Their focus often remains on store openings, negotiations with suppliers to drive down prices, and other cost management measures. If sales are sluggish, they might have a go at more promotions or mine their loyalty card data to conduct a few one-off marketing campaigns. Any new, digital-related opportunities they decide to explore tend to be regarded as “projects,” even though these are the very essence of their future identity and need to be pursued at scale.
Amazon's growth trajectory illustrates how out of date this thinking is. In the past decade, Amazon's revenues have grown by 32 percent a year on average, reaching $48 billion in 2011. With market capitalization in the region of $110 billion, Amazon is more highly valued than Target, Walgreens, and Kroger combined. Yet how many traditional store operators have come anywhere close to capturing the potential growth that digital commerce can deliver in all manner of categories, or even carefully considered what that potential might be?
If retailers fully grasped the pace of change and how it will affect their businesses, maybe their thinking ...