Seems every time you turn around, some new business is having huge success by disrupting the way business in their category is done. Uber is doing it to the taxi industry, Air BNB is doing it in the hotel industry. So, what is or will be the great disruptor of the retail industry? Does it already exist or is it yet to come? And more importantly, what should you do about it?
In the Uber and Air BNB models, the disruption comes from tapping into the shared economy. Instead of customers going to established brands for their rides or travel accommodations, they are renting/buying from individuals. So, it retailing, you could say that model already exists - in the form of eBay or Craig's List. But do those models really compete with chain retailers? A lot of their product is used goods, more of a cyber-yard sale than a retailer. Except you can find plenty of brand new items on eBay now and a lot of people have set up eBay stores, selling brand new goods.
Whether those compete with a retailer probably depends more on what the goods are. We have a number of furniture retailers. Between high shipping costs and ability to see the furniture in person, I don't think these models compete well. They may take some of the lower end customers and younger demographic out of the market, but those are not the mainstays of the retail furniture business. Electronics, however, are a different story. If you have a brand name and can find the exact same item for less on eBay or Craig's list, you're probably going to be more inclined to buy.
Walmart and Amazon could be considered other models of disruption in retailing. Walmart, with it's massive scale can dictate prices from it's vendors and undercut the market - giving consumers almost everything they could want in one store at lower prices.
Amazon also give customers everything they could want, but instead of lower prices being the deciding factor, convenience and supply are. You can easily find whatever you're looking for on your phone or sitting at your desk. With a click of a button, it will arrive at your door - you never have to go out searching for it. Add to that Amazon's incredible recommendation algorithm that seems to exactly the stuff you like and serve it up to you whenever you come to their site. How can other retailers compete with that?
All of these disruptors have been around for a while now. Is there a new twist on retailing that is going to change the industry? Is it the pop-up store or in-store virtual reality assisting customers? No matter what it is, the real question is what should you be doing about it if you're a traditional retailer?
The key is making good use of all the tools available to you. You have data at your fingertips and the ability to gather more. Transactional data can be pulled together and analyzed, augmented and put into use to make sure you're connecting with those you have the best chance of selling more goods to. Social data can be culled from your customers and added to your data pool to further cement your ties with your customers and to seek out new customers who fit the same profiles. You can use the digital tools available to enhance your bottom line. You can get all your employees on social media and build a wealth of goodwill and additional sales.
To not only survive, but to thrive, you need to look at how you do business and where you can enhance it using the same tools that many of the disruptors are using to tip the scales in their favor. It will be different for each retailer, so you have to look at your own business and see where your opportunities lie and what you are capable of doing. With the right insights and willingness to boldly go where no retailer has going before, your company could very well be the next great disruptor of retailing.