Inside This Issue - Opinion
Retailers must adapt to changing landscape
April 16th, 2012
The Oxford Institute of Retail Management has undertaken an 18-month study to determine where retailing is headed at a time when unprecedented levels of competition — from the local to the global — rapid technological innovation and changing consumer attitudes are radically altering the landscape.
"The traditional retail business model is clearly broken," says Richard Cuthbertson, director of the institute, which is based at Oxford University’s Said Business School. "We see the negative impact of retail sector change — redundancies, bankruptcies and takeovers as retailers try to adjust to new channels and formats, reduce costs, improve efficiency and survive. At the same time, emerging technologies are providing the best retailers with new opportunities to interact with customers."
Walmart’s struggles to consistently generate meaningful comparable-store sales increases in the United States, the management upheavals at Carrefour in recent years and Tesco’s loss of market share in the United Kingdom illustrate how even the world’s largest and most powerful retailers are being tested. As those titans work to adapt tried-and-true formats to new realities, the likes of Dollar General, Whole Foods Market and Amazon are striking new chords with today’s shoppers.
It is no surprise that the study, which is sponsored by Intel, will carefully examine the dynamics governing the relationship between traditional brick-and-mortar retailing and digital alternatives.
"Few retailers have yet developed a convincing strategic approach effectively marrying online and in-store retail," Cuthbertson notes.
Anyone with a stake in retailing should have an interest in this project. When the results do come out, however, they deserve careful scrutiny that measures the findings against real-world experience. Retailers have learned the hard way that academics, consultants and other experts aren’t always right, and have sometimes led executives who listened to them down the wrong path.
Whatever the ultimate worth of the Oxford Institute’s new study, it has already made one valuable contribution by calling attention to the fact that, in Cuthbertson’s words, "the pace of change in the retail landscape is unrelenting, and we will see a fundamental shift in retail practice and experience." That’s a development with which everyone in the industry will have to come to terms.