Digital divide turns into a chasm
I saw an Amazon delivery van this week. It was brand spanking new and was proceeding through my tiny rural village. Usually deliveries are done by very cheery drivers in a motley collection of old cars, vans and the occasional small lorry.
I worried about what these entrepreneurial types will do for a living if Amazon completely takes over this element of the retail chain as well. They could work for Amazon of course, and drive a super new vehicle, but will they be paid well, will there be any job security, will it be the same as working for themselves? Should we be worried that Amazon is taking over the entire retail space – speeded by the pandemic?
Plenty of comment arrives in my in tray, and I am sure in yours too, warning of this Amazon take-over. At the same time, plenty of other people are arguing that it is a wake-up call to retailers, and as long as they move quickly enough, they can still change fast enough to compete.
This difference between those who are fighting to change and those who have given up the struggle is clearly evident on the high street of every town and city, across the world. Take a stroll around one evening as I did in my little market town and it is obvious. Some shops still have their lights on, with welcoming exciting shop windows, even though they are closed for the current lockdown. They have notices on the window inviting people to browse their 24/7 websites and “click and collect”. They are open for business despite the restrictions. They will probably survive. Others have turned off the lights. Even more have given up and left the premises completely.
Make your choice
There is always a choice in life. Every animal knows that. Either you fight to survive or you give up and suffer the consequences. Watch a newly born lamb struggling to stand up within minutes of its new life, or a newly fledged bird trying to make that first flight to the next bush.
Retail is no different, nor is hospitality, nor are airlines. It is tough for everyone, but watch out for the resilient and the resourceful. They are the ones who have lessons for the rest of us.
Incidentally, Mary Portas, speaking at the virtual World Retail Congress 2020 highlighted the positive part of retail change, in terms of our desire, and that of many brands, to be more sustainable in the way they do business. She referred to Gucci, which she says is completely redefining its business to have less of an impact on the environment.
“Brands need to rediscover their authenticity and communicate in genuine ways, particularly as consumers no longer want the hard sell promise that an item is going to change their lives,” she said. “Gone are the days of boards comprising middle aged men second guessing how people want to live and buy.”
She gave the example of the Body Shop that she believes has rediscovered its voice. “If you think what the Body Shop was when Anita Roddick had it, she was doing all the stuff I’m talking about now, in the 70s. She built a retail chain of 4,000 stores across the globe. Then it gets bought out by L’Oréal and they took the soul out and they put in the systems and we lost the magic,” she says. “Now they are bringing that back and doing a great job.”
She also cited the example of American retailer Zappos which has set up a helpline during the pandemic for customers to call and talk about anything. “Who’d have thought a retail brand would be doing that in 2020?”
Another big area is the secondhand market. Portas set up Mary’s Living and Giving shops with Save the Children a whole decade ago and now, she says her 26 stores are some of the most successful shops on high streets. And she believes retailers could soon be dedicating floors to people wanting to up-cycle and recycle items.
Clothing retailer Cos has opened up a market place online, so you can buy and resell their items – something else that would have been unheard of until recently, as retailers were preoccupied with margins.
“I think we are going to be looking at new business models where the industry will say: here is a design, a suit we’re putting out. We’ll take your orders now and [produce] according to the orders. [The next] generation is buying into that and will respond to that.”
The next few years will see a fundamental reshaping of how the industry operates, with fewer physical stores but more multifunctional social interactions.
“We are going to see spaces that will be given over to the arts… as the new anchors are not about what we sell but how we sell it.” The division between digital and physical brands will also disappear. “And the most important space that any brand can take up will be in peoples’ hearts.” By that of course, she means customer loyalty!
Digitization catalyzed by the coronavirus pandemic has dominated the headlines and minds of business leaders for the past several months, delivering optimistic growth statistics and figures across markets and industries. Microsoft CEO Satya Nadella shared his view a few months ago that “we’ve seen two years’ worth of digital transformation in two months.”
The warning from consultants Mondato is that as there has been a sharp increase in adoption and usage of digitally delivered services, a growing digital divide has emerged between those individuals and companies with the requisite resources to take advantage of digital transformation, and those without. “As digitization swallows various market segments,” says the report, “the question begs: are those crossing the digital threshold representative of those who were already bound to naturally adopt digital services, and if so, what happens to those left even further behind?”
So get out there and start fighting – digitally of course.