Change: Expect More of It

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The more things change, the more they stay the same. That was my first reaction when I looked over the listing of the nation’s largest retailers (begins on page 20A in the August/September issue of Chain Store Age). Wal-Mart Stores easily retained its No. 1 spot, with a staggering $405 billion in revenue. Even taking its foreign sales out of the mix, the Bentonville, Ark., giant was still far out in the lead, at $304.9 billion. By comparison, the No. 2 ranked chain, The Kroger Company, had revenue of $76.7 billion.

But don’t be fooled: While the cast of players in the Top 100 hasn’t really changed that much, retailing itself is in the midst of a profound evolution. Much attention has been paid—and rightly so—to the value and deal mind-set that so many consumers have embraced over the past 18 months. Many industry experts warn that shoppers’ frugal habits are likely to linger for some time. Others argue that the current appetite for stinginess may simply be a response to the downturn and the uneven, slow recovery. However it plays out, there is little question that the change in shopping behavior has, at least in the short term, had a dramatic impact on the industry, fueling the expansion and appeal of such extreme-value players as Dollar General, Family Dollar, Dollar Tree and Aldi outside of their core markets.

But other forces are also at work, forces that seem likely to transform the industry in much more profound and long-term ways. As our annual State of the Industry Report (page 1A) makes clear, retail is being hit with wave after wave of game-changing technologies, from the rise of social media to the exploding growth of smartphones. More change is expected in the next five years than in the past 40. Indeed, the name of the report says it all: “Think Forward. In a Race with Change.”

The pace of the change chronicled in the report (prepared by Interbrand Design Forum) is nothing short of remarkable. At a time when many retailers are still developing their online channels and integrating them with their other silos, a new channel is suddenly demanding their attention. According to the study, almost one-third of American consumers already use their mobile phone for shopping.

There is little question that retailers have their work cut out for them, and getting customers to open their wallets is only part of it. The real challenge will be integrating and fully maximizing all the different channels that shoppers now have available to them. From brick-and-mortar and catalog to e-commerce, social media and mobile, each channel offers retailers the chance to extend and enhance their brand. To what extent they succeed in embracing this opportunity could well determine their future.

PS: The State of the Industry Report doesn’t just talk the talk about technology, it walks the walk (the same goes for the folks at Interbrand Design Forum). The report is embedded with QR codes that, depending on the article, take you to podcasts, white papers, videos and blogs. Just snap a photo of the code with your mobile phone and see where it takes you online! 

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