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How A Hybrid Model Can Help Retailers Survive The Online-Shopping Trend

How A Hybrid Model Can Help Retailers Survive The Online-Shopping Trend

With shoppers finding much of what they want online, the future of the brick-and-mortar store can seem bleak.

Such major retailers as J.C. Penney, Lowe’s, Gap and Family Dollar, among many others, have announced plans to close at least some stores across the United States this year.

Is it possible, though, that an answer for what’s troubling retailers these days could be a hybrid model that marries digital with an in-store experience? Already some are trying such an approach, as when Amazon opened a Black Friday pop-up store in Madrid where customers could browse, scan the QR code to learn more about any item that drew their interest, and instantly make a purchase online.

“This no-pressure concept is becoming increasingly popular as today’s customer strongly rejects any hard-sell tactics,” says J.J. Delgado (www.jjdelgado.xyz), a former Amazon marketing manager in Europe who led the largest sales day in the company’s history.

“Instead, they favor an environment that allows them to make their own choices based on all the information that is available to them.”

Retailers have been facing a sea change in their customers’ shopping habits for some time now. A recent Harvard Business Review article pointed out that some stores are handling the problem by cutting the number of employees and reducing the amount of training they give employees. But the three Wharton School of Business professors who wrote the article conclude that approach is counterproductive.

In Delgado’s view, retailers can’t waste time lamenting what was. They need to adapt to what is.

“The future of shopping is not in decline, it is evolving,” he says.

Delgado offers a few suggestions on how a hybrid of digital with brick-and-mortar can work for retailers determined to survive in the digital marketplace:

The customer must experience something they can’t online. Shopping has become a multi-sensorial experience that goes much further than a mere retail transaction, Delgado says. It is about replacing the traditional shopping experience and putting the customer at the center of the whole retail process. “The customer wants authenticity and something of real value, not just monetary value but emotional value,” he says.

Store staff must provide the human connection not available online. “That human connection is the store’s trump card and they must play it right,” Delgado says. “Maximizing that connection and combining it with online connectivity is fundamental to creating the ideal hybrid experience.”

Companies must seek innovative ways to manage their new reality. The changing retail landscape is paving the way for deals between manufacturers, retailers and delivery companies to create ‘mashups’ that allow them to combine their strengths and combat their weaknesses, Delgado says.

“Amazon is the main player in this game, as we have seen with their acquisition of Whole Foods Market,” he says, “but many others are following suit.”

One example is the clothing chain Zara. The chain’s London store features interactive mirrors and high-tech facilities, and combines traditional shopping areas with online areas where customers can scan QR codes and make orders that in many cases are instantly delivered to the store on the same day.

“Some see the digital transformation as the cause for store closures, but it’s very possible that this same digital transformation also could provide the solution to retail woes,” Delgado says. “It is clear that we will soon see more hybrid-retail strategies as retailers seek ways of consolidating their online and offline presence to deliver a seamless customer experience.”


About J.J. Delgado

J.J. Delgado, co-author of Think Video: Smart Video Marketing & #Influencing (www.jjdelgado.xyz), is a professional speaker and digital-marketing expert. He is a former employee of Amazon who led the largest international-sales day in the company’s history. In addition, he was recognized as one of the Top 15 unofficial LinkedIn influencers of 2018. He has helped drive the growth of many organizations, including Amazon, Burger King, Pepsi, Hertz, Ford, Liberty Mutual and others.












Emerging Market Retail Growth Outlined in New Report

New York, NY – Chile ranks first place in terms of global retail market potential in A.T. Kearney’s latest  Global Retail Development Index (GRDI).

With Uruguay, Brazil, Peru, Panama, Colombia, Costa Rica and Mexico also in the index of top emerging economies ready for retail expansion, Latin America “continues to show strength as a regional retail growth market,” according to the business consultancy.

The region maintains its dominating position in the GRDI, with three countries in the Index’s top five positions, as an expanding middle class offers lucrative opportunities.

The “diverse retail ecosystem” includes Brazil’s huge market, Chile’s  sophisticated mid-sized market, and “small gems” such as Uruguay, where high consumption levels are attractive to luxury brands, the GRDI said.

“While some Latin American countries face economic and political challenges, continued economic and political stability in leading countries has led to increased consumer and investor confidence and created a favorable environment for retail.”

International retailers there “are entering and gaining ground in a highly competitive environment with local and regional leaders. This battle is most intense outside of the region’s capital cities, where new markets are emerging as consumers opt for modern retail formats.”

Asia

Asia has a number of fast-growing economies that offer fertile ground for retailers, as growing populations, rising incomes, and increasing affinity for modern formats helps retail sales increase rapidly. Modern retail is spreading beyond the largest urban centers to smaller, untapped cities and regions.

The region saw several improvements in the rankings, led by China, which rebounded into second place, Malaysia, which re-entered the top 10 for the first time since 2009, and Indonesia, which moved up four places from last year’s ranking. Other Asian countries in this year’s Index include Sri Lanka, India, the  Philippines, and Vietnam.

Even with less-bullish economic growth, “China remains impossible for retailers to ignore. Retail sales in the world’s most populous country increased 13 percent in 2013 to $3.7 trillion, and consumer confidence rose.”

The Middle East and North Africa

A dynamic retail region – the Middle East has a growing and young population, strong GDP growth, and increasing consumer confidence and spending.

With Qatar scheduled to host the FIFA World Cup in 2022 and Dubai recently winning the Expo 2020 bid, the region’s construction and infrastructure boom should continue, thereby benefiting retail.

Middle East and North Africa (MENA) consumers” are becoming increasingly more demanding, seeking formats to better meet their needs along with more interesting creative concepts. Some markets are saturating, particularly Dubai, and local developers are now expanding across the region.”

Fewer international companies entered in 2013, but those in the region “focused on expanding their footprint and growing local brands. E-Commerce in MENA is predicted to grow from $9 billion in 2012 to $15 billion by 2015,” according to a PayPal study.

Central Asia and Eastern Europe

The region’s highest-ranked countries are some of the GRDI’s most shining “small gems” – countries such as Armenia, Georgia, Kazakhstan, and Azerbaijan, whose location and unsaturated retail environment makes them attractive options for international retailers.

On the other end of the spectrum is Russia, which leaped back up the rankings this year “as its retail potential outweighed the country’s lingering risks.”

Sub-Saharan Africa

Africa is marked by distinct regional differences. In the West, Africa’s most populous region, international retailers including Walmart and Carrefour, have succeeded in navigating the challenging business landscape, targeting middle- and high-income consumers who are brand conscious and want convenience, quality and variety.

The East” is untapped and increasingly attractive, as the largely informal markets feature few international retailers. Regional retailers dominate the region targeting all income segments.”

In the South, the most developed region with stronger infrastructures, high incomes, and macroeconomic stability, South African retailers lead the growth with their close proximity and cultural alignment. Regional and local retailers are leading the e-commerce push, particularly among affluent consumers.

Mike Moriarty, A.T. Kearney partner and co-author of the GRDI said, “With GDP growth of 5 percent, rising household incomes, fast urbanization, and a growing middle class, Sub-Saharan Africa is a region of massive potential for retailers.”

Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide and analyzes 25 macroeconomic and retail-specific variables that help retailers devise successful global strategies to identify emerging market investment opportunities.

06/17/2014