The document discusses how digital technologies are disrupting the retail industry and forcing traditional retailers to reimagine their business models. New digital natives and tech giants like Amazon and Alibaba have created unprecedented personalized shopping experiences that are changing consumer behaviors. For traditional retailers to survive, they will need to innovate, adopt new business models, and ensure frictionless integration between online and offline shopping to recreate the consumer experience and move towards a culture of continuous reinvention and agility.

1. Digital Survivors — Death of the
Retail Culture
Author: Shamayun Miah

2. 2
Introduction
The emergence of new digital technologies, leveraged by the
likes of Amazon Go, Amazon Key and pop-up stores, are
disrupting the way consumers shop and the competition has
proliferated. Demand for digital services and personalised
experience challenges incumbent traditional players across all
industries. Democratistion of technology and data have led to a
decline in the average lifespan of S&P500 companies — now less
than 20 years, compared to an average of 60 years in the 1950s.
The landscape of retail players and consumers has been
drastically reshaped and the end-to-end consumer value chain
is expected to transform beyond recognition in just two to five
years. With online commerce growing at four times the rate of
the overall industry, many traditional retail giants have made
significant investments — upwards of $70 billion USD — in digital
channels. So, why do their market caps continue to decline?
Digital Survivors – Death of the Retail Culture
To answer this question, we need to first understand that today’s
consumers represent a complex and unique set of personal
preferences, shaping how consumers want to engage — and be
engaged. It’s these needs and expectations that are catapulting
new and unlikely entrants into the forefront of retail, forcing
traditional players to reimagine their business models.

3. 3
Power of the
Purchase

4. 4
Power of the Purchase
The purchasing power of millennials is expected to be a $200
billion USD spend in 2017. With an affinity for technology and a
preference for experience over ownership, 57 percent of
millennials are using technology-based comparison services to
ensure they receive the greatest convenience at the lowest cost.
Then, there is the rise of generation Z. The Z-ers, born between
1995 and 2005, prefer to interact with brands solely using
technology, like Snapchat and Instagram. Today, 55 percent
choose brands that are eco-friendly, 29 percent are more likely to
make electronic purchases than millennials, and most Z-ers are
spending up to 11 hours a day on social media. Furthermore, we
shouldn’t overlook the generation X buyers and baby boomers.
Those empty nesters and retirees with larger disposable
incomes are also looking for innovative products and services.
Today’s Retail industry is being impacted by digital natives and
new entrants. This includes increasing pressure from large tech
firms (e.g. Apple, Microsoft, Amazon, Google), with three out of
four having a thriving retail presence.
Digital Survivors – Death of the Retail Culture
Global digital giants like Alibaba and Amazon have quickly created
and adapted to new business models and market opportunities,
their platforms offer unprecedented breadth, depth and speed.
Each brings the promise of new, innovative and personalised
experiences that are already changing the shopping and buying
behaviors of today’s modern retail consumer.
Take Alibaba. Alibaba changed the customs of China’s 2017
Singles’ Day Shopping Festival, netting $25 billion in one day only
(a 40 percent increase from the previous year). They achieved this
by adopting an innovative fanfare approach that leveraged
celebrity entertainment and interactive apps to download coupons,
raffle tickets, gift vouchers — and more! This innovative giant
successfully created an atmosphere of exponential excitement
leading up to the event. Traditional retailers will need to adopt
innovative approaches to stay in lockstep; this includes forming
new partnerships and adopting emerging technologies to unleash
fresh ways of engaging consumers to drive endless opportunities.

5. 5
From Fiction to
Phenomenon

6. 6
From Fiction to Phenomenon
Our lives are quickly evolving from what was once fiction to a
new reality. Leading-edge retailers, using emerging
technologies, are rewriting the rules. One such example is the
use of mobile payments and artificial intelligence to provide
enhanced personalisation, product transparency and seamless
experiences.
Virtual reality (VR), and augmented reality (AR) have opened the
door to a whole new world of immersive shopping. Blockchain
offers the potential for greater transparency into a product’s
pedigree, from origination to destination. In addition, buyers are
truly influencing brand authenticity and credibility — in the
moment — using powerful social influence (e.g. Twitter, Facebook,
Instagram, Snapchat). Together, these technologies are
completely changing the consumer experience across the entire
supply chain.
Digital Survivors – Death of the Retail Culture

7. 7
Companies like, Macy’s, Target, Sears, Nordstrom and
JCPenney, are all great companies that have been around for
more than 100 years. All have played a pivotal role in defining
the American retail culture in the last century, and all have been
innovative in their time, employing more than a million people
between them.
Yet, between 2006 and today, these retailers have significantly
declined in market capitalisation (Sears and JCPenney, both by
more than 90%). Some might argue that they haven’t moved to
the Digital Age. But, the answer is not that simple; they — like
others — have invested in digital technologies, mobile, commerce
platforms, in-store digital kiosks, employee-tablet computing
and more. So where’s the difference?
Digital Survivors – Death of the Retail Culture
Market Value
2006
Market Value
Today
Change
Best Buy 28.4B 16.9B -40.5%
JCPenney 18.1B 1.1B -93.7%
Kohl’s 24.2B 7.5B -69%
Macy’s 24.2B 6.5B -73.1%
Nordstrom 12.4B 7.0B -43.7%
Sears 27.8B 682.3M -97.5%
Target 51.3B 34.2B -33.3%
Walmart 214.0B 264.8B +23.8%
Amazon 17.5B 469.1B +2590.0%

8. 8
If you look at Amazon or Alibaba, they are growing at
phenomenal rates — and not just because they are digital. They
have won the mindshare of the customer and their wallet. These
companies are succeeding because:
Digital Survivors – Death of the Retail Culture
Market Cap
Today
Share Value
Nov 2007
Share Value Oct
2017
Growth over
10 years
Alibaba 530.53B 90.56 1,107.32 +1142%
Amazon 462.39B 88.85 181.58 +108
They have new business models that are
disruptive, technology-based and data
driven.
1.
Their brand is the experience - valued by
the consumer and made up of many end-to-
end components tied together through
frictionless integration (e.g. logistics, online,
mobile).
2.
They are built for speed and continuous
innovation.3.

9. 9
Attention All
Shoppers

10. 10
Attention All Shoppers
Recognising that these companies are never going to stand still,
the next leap in their continuous evolution and disruption is to
infuse cognitive technologies into the very fabric of their
businesses. They understand that democratisation of
technology and how data is making the whole world smarter,
healthier, and perhaps even happier, is creating new economic
and social value.
One thing is certain. Retail is standing at the leading edge of
technology transformation and digitisation. As it has for
centuries now, the Retail industry will continue to nudge
convention and drive innovation to meet consumer demands.
However, investment in technology alone will not slow down
the decline of traditional retail giants. Instead, they will need to
innovate, adopt new business models and assure frictionless
integration. They will have to disrupt themselves by recreating
the shopping experience, and they will have to move from a
monolithic presence to a culture of agility, speed and
continuous reinvention. They must succeed in creating both, a
personalised experience for one — as well as a shared
experience for all. Welcome to the new reality of retail.
Digital Survivors – Death of the Retail Culture

11. Author: Shamayun Miah
@shamayunm
www.linkedin.com/in/shamayunmiah
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