Last week: we shared our thoughts about the trends and stories that will shape and change retail in 2018. Why stop there? Content Analytics’ VP of Partnerships and Business Development Kenji Gjovig shares his thoughts on the stories and developments that shaped 2017 and what we should all be paying attention to this year.
Thoughts on 2017
My first thought about last year was about the continued decline of traditional brick and mortar retail (see more below). However, that’s not news. What is the biggest retail news story of 2017 is the strengthening of omnichannel retail. 2017’s biggest story is how omnichannel retail basically took over. Of course, the most obvious example is Amazon’s Whole Foods purchase. Overnight: Amazon went from 2 channels (online + mobile) to 3 (online + mobile + store) by acquiring ~450 high-end grocery stores.
Coincidentally, on the same day, Walmart went the opposite direction and acquired Bonobos, the formerly online-only men’s fashion retailer (though Bonobos had recently started opening brick and mortar Guideshops).
2017 may go down as the year of the retail acquisition:
- CVS acquired Aetna
- Office Depot acquired CompuCom
- PetSmart acquired Chewy
- Ace Hardware acquired The Grommet
- Walmart went acquisition crazy: Parcel (delivery), Modcloth, Moosejaw, Shoebuy (in addition to Jet and Hayneedle in 2016)
- Albertsons acquired Plated
- Target acquired Grand Junction
- Camping World acquired TheHouse.com
- Samsonite acquired eBags
- Barnes & Noble Education acquired MBS Textbook Exchange
- Alibaba acquired Intime
2017’s Continued Decline
We do have to mention the closures because they were so notably prolific. And it wasn’t just closures that made the headlines. It was the ongoing and non-stop bankruptcy announcements that were just as newsmaking:
|Ascena Retail Group||268|
|Abercrombi & Fitch||60|
*I had forgotten they were still a thing! Clearly, I wasn’t alone.
Also, let’s be clear: omnichannel retail is not the only culprit for these massive downsizings (the most since the Great Recession). Private Equity-owned retailers suffered under the obligation to debt service after being levered up massively after being taken private. All these retailers needed better cash flow management and needed it a long time ago.
The Key Takeaways
In 2018: expect the trend of consolidation (and store closures) to continue. This space is changing very quickly and many legacy companies cannot adapt as quickly as customers want them to. With the growth of omnichannel retail, competing only on price or geographic location is not sufficient to retain loyal customers.
Single channel retail is getting harder and harder. If you can’t reach the customer in all of the ways she wants to shop/research/purchase/receive products: you’ll struggle. Customers expect a lot from retailers, so those who only communicate to them with legacy methodologies are probably doomed.
What to do?
In 2018: survival may still be tantamount to success.
A checklist for brands and retailers:
- Channels. Maintain and own an omnichannel presence, which includes optimizing your content for all your eCommerce channels.
- Content. Fix all your content. Brands and sellers with a poor eCommerce product content will hemorrhage customers to other products because many other brands and retailers are providing better and clearer information.
- Assortment. Brick and mortar retail is about a few products. Omnichannel retail is about long tail assortment of products.
- Metrics. Monitor metrics that you haven’t previously paid attention to. Use analytics tools to aggregate data. Your monitor short list:
- Pricing across all channels
- Search performance
- Content quality measurement
- Availability and in stock
Clear-headed and innovative retailers and brands are already planning for another gangbuster year. I’m looking forward to working with our retail partners and their vendors to ensure that all members of the online ecosystem continue to thrive.
If there’s one thing I know for sure: 2018 won’t be boring!
I for one am ready for whatever it holds.