As this rockin' picture reminded me, the retail industry, even with its current negative challenging forces, remains very vibrant. 2021 confirmed that we are all resilient consumers who will continue to shop our favorite brands. In May 2021, E-marketer forecasted that retail sales globally would rise 6% to just over $25 trillion, which was a significant comeback from 2020. By the end of year, 2021 global retail sales actually grew 9.7% reaching total spending of just over $26 trillion.
2021 in-store sales grew a healthy 8.2% globally to just over $21 trillion which was more than was spent in 2019. “Pent-up demand from in-person shoppers accelerated the recovery by two full years.”
When this E-marketer research was published in January 2022, brick-and-mortar sales were projected to grow 2.6% to 3.4% for the remainder of the forecast out to 2025. More spending is expected in physical retail than ecommerce in 2022 ($702 billion versus $604 billion), despite its slower growth rate.
This article and this picture from a recent NRF trade event in Cleveland (Home of the Rock & Roll Hall of Fame) are a reminder that retail does indeed rock. It includes some of my favorite statistics on the industry and some projections on where we go from here.
For quite some time, I have been predicting that the future of retail will be driven by stronger branding and increased digitally influenced immersive customer experiences. COVID-19 became a major accelerator of digital transformation trends with technology often becoming the differentiator to changes in consumer loyalty.
“The pandemic ushered in an unprecedented level of channel switching and brand loyalty disruption. A whopping 75 percent of consumers tried new shopping behaviors, with many of them citing convenience and value. Fully 39 percent of them, mainly Gen Z and millennials, deserted trusted brands for new ones. That restlessness is reflected in the fact that many younger consumers say that they are still searching for brands that reflect their values.”
This article summarizes the continued importance of branding focusing on the 2022 leaders as researched in one of my favorite annual reports from Brand Directory / Brand Finance.
Our physical retail and digital innovation exploration journey so far:
Part 1 - We explored the humble beginnings of department stores, supermarkets, and the first use of a bar code in a physical store; Part 2 - We expanded our innovation journey to ecommerce, smartphones, and robots; Part 3 -We shifted to loss prevention technologies: cash registers, CCTV cameras, and Electronic Article Surveillance; Part 4 - Fast rising RFID, Self-checkouts, and the Internet of Things (IoT) made an appearance.
In this Part 5, we geo-locate ourselves with GPS, go wireless with Wi-Fi, and become influencers on Social Media.
The Global Positioning System (GPS), as you might have guessed, has their origin in space, the final frontier. In 1957, Russia launched Sputnik, the first successful space satellite. Scientists at the Applied Physics Laboratory (APL) at John Hopkins University observing the strange radio signals discovered what became known as the Doppler Effect.
In Part 1 of this series, we explored the humble beginnings of department stores, supermarkets, and the first use of a bar code in a physical store. In Part 2, we expanded our innovation journey to ecommerce, smartphones, and robots. In Part 3, we shifted to loss prevention technologies some of which have become powerful workhorses in store operations: cash registers, CCTV cameras, and Electronic Article Surveillance (EAS).
In this Part 4, we provide some definite answers on the start and adoption rates of RFID, we seek more contactless answers with self-checkout, and we travel on the Internet and discover more things.
The consensus is that the roots of radio frequency identification can be traced back to World War 2. “The Germans, Japanese, Americans and British were all using radar—which had been discovered in 1935 by Scottish physicist Sir Robert Alexander Watson-Watt—to warn of approaching planes while they were still miles away.” The challenge was identifying the planes and whether they were friends or foe.
“The Germans discovered that if pilots rolled their planes as they returned to base, it would change the radio signal reflected back. This crude method alerted the radar crew on the ground that these were German planes and not Allied aircraft (this is, essentially, the first passive RFID system).”
In Part 1 of this series, we explored the humble beginnings of department stores, supermarkets, and the first use of a bar code in a physical store. In Part 2, we expanded our innovation journey to discover the evolution and success of ecommerce, smartphones, and robots.
This Part 3 focuses on technologies that were originally invented to secure profit (cash register), property & high-risk areas (CCTV Camera), and consumer products (Electronic Article Surveillance or EAS).
Multiple of these originally envisioned security technologies transitioned into powerful data collection tools that optimize and increase the profitability of store operations. Great pleasure in one of my current roles to be working on next generations of multiple of the solutions in this series.
It might be surprising, but the original purpose of the cash register was to stop theft. The inventor was James Ritty, a saloonkeeper in Dayton Ohio.
The COVID-19 pandemic has drastically accelerated the adoption of technology in business, enabling companies to optimize their operations and meet changing consumer expectations. In Part 1 of this article series, we discussed the origin and success of department stores, supermarkets, and the retail bar code.
Let’s continue this exploration of the past to discover the success of the future. In Part 2, we review e-commerce, smartphones, and robots. Now ubiquitous in our lives, how did they get their start and what can we expect in the future?
Sometimes it seems hard to believe there was a time before online shopping. Today, we can order basically anything, from books and housewares to groceries and cleaning supplies, to be delivered right to our door in just a few days. That convenience has certainly paid off, but how exactly did we get here.
As with other emerging technologies, one can debate the origin of e-commerce. Candidates include a pizza, weed, a CD, or computer parts.
Can you imagine shopping in a retail store without bar codes or a cash register? In this first of a series of articles, we explore the evolution of retail -- from store formats to the continuous innovation and deployment of new technologies.
Who created the first supermarket and department store and how are these sectors performing today? From humble beginnings where are we today with technology innovations such as bar code scanning, the cash register, self-checkout, RFID, CCTV cameras, robots, drones, and much more?
As McKinsey recently summarized, “the pandemic has dramatically increased the speed at which digital is fundamentally changing business.”
Fifty-one percent of companies are leveraging digital technologies, multiple of which are discussed in this series of articles, as strategic differentiators from competitors.
Let us start with store formats and that first consumer item scanned in a retail store.
Attending NRF 2022 in New York last week on multiple levels was surreal. Three live offsite events that I attend every year were either cancelled, postponed to virtual or had last minute changes in locations due to COVID restrictions. Flights and hotels were changed three times to accommodate weather challenges in the South and the evolving customer meetings scheduled for the Big Show.
Multiple of the sessions that I attended had more people that I expected. Yet the main show floor was eerily empty of major exhibitors. Much innovation inspiration was possible by spending time in the busy innovation and start-up zones in the lower level.
Turns out fewer major booths and quality time with retailers more than offset initial COVID concerns. NRF did a great job with masks, using Clear to validate vaccinations, and providing COVID test kits to increase safety. The Big Show on some levels was actually getting too big and 2022 was a refreshing opportunity to moderately transition to the next phase of retail as we continue to emerge out of the pandemic.
Amazon 4-star - London UK
Jeff Bezos had a few amazing tricks up his sleeve as he originally wanted to name the company 'Cadabra'. Amazon's first lawyer talked him out of it as the name sounded too similar to 'cadaver', especially over the telephone. When the company was founded on July 5, 1994, Bezos settled on the name Amazon because it started with the letter A and its association with the largest South America River.
Even though the original company focused on selling books online, Bezos' vision was always to become the 'everything store.' Fast forward to June this year, Amazon is now the most visited e-commerce website in the United States, with nearly 2.5 billion monthly visits. To put it in perspective, that is more than the next six major retailers online traffic combined.
"Beginning with booksellers, the e-commerce giant has expedited the closure of many retailers and threatens to redefine the standards of shopping in a digital world. Retailers are forced to lower prices, optimize their systems and processes, and reduce profit margins in favor of competition; meanwhile, Amazon continues its trek toward dominance. First coined in 2012 by Steve Weinberg, this is the Amazon Effect."
As we enter a new year, what is the status of the Amazon Effect? Is next year the end of physical retail? What are the key strategies to win the future of retail?
Cambridge Newton's Office and a Descendant Apple Tree
One year ago, I published a video titled “Leadership Skills for the Post COVID-19 ‘New Normal’.” Citing the accomplishments of Isaac Newton, in that video I summarized three leadership skills to ensure post-pandemic success.
During the ‘Great Plague’ of 1665, Newton was forced to self-isolate away from Cambridge in the countryside for over a year. This pandemic induced confinement became his ‘Annus Mirabilis’ or the ‘Year of Wonders’.
A few weeks ago, a year after the video, I had the great pleasure of visiting Cambridge University in the United Kingdom. On a guided tour through the campus, similar inspiring thoughts arose as a previous article on Florence Italy where I suddenly realized that I was walking the same streets as Leonardo da Vinci, Galileo, and Michelangelo.
In addition to Newton, what are some of the other history luminaries that walked the streets of Cambridge? Why was the pandemic isolation the ‘Year of Wonders’ for Newton? What leadership skills will be critical for post-COVID-19 success?