After Strong Holiday Season, Physical Retailing Not Disrupted and Amazon Opens Go Store

Strong results this past holiday season are further evidence that retail is not on the verge of complete disruption. Traditional bricks-and-mortar retailers such as J.C. Penney, Kohl’s, Macy’s and Target all reported sales gains for the holidays.

This is an indication that traditional retail is not succumbing to disruptive threats. Instead, there is integration of bricks-and-mortar and online. And, retailers are seeing the value of physical stores—for example, Kohl’s has resisted closing its stores after finding that its online sales did better in areas where the company had physical locations. Thus, contrary to what many have said, traditional retailing is not dying.

A lesson is that retailers who actively work toward building their business, as opposed to behaving as if death’s knell is already here, can achieve favorable results. In contrast, retailers who tend to give up the ghost, see disruption as essentially inevitable and make drastic changes, which usually aren’t right, can easily end up hampering their opportunities to move forward with the business.

Treating the business as dying and going off in pursuit of totally new directions might seem like the solution on the surface, but it can easily distract from doing what’s needed to enhance the business. It can weaken the necessary nurturing of the business that helps shape future growth. So, in light of favorable holiday performance, retailers need to continue to move forward, and avoid getting hung up in the kind of panic that can easily emerge when disruptive threats loom.

Furthermore, now that the holidays are over, we continue to see signs of the value of bricks-and-mortar locations. Amazon recently opened its Amazon Go store, a physical location with innovative high tech features. A concept that Amazon has been testing for a while now, the Amazon Go store automatically tallies the prices of items that shoppers select, and shoppers are automatically charged for their purchases so there is no need to wait in line and be checked out by a cashier. In Amazon Go Stores, shoppers can just make their selections and go.

According to the January 22, 2018 Wall Street Journal article “Cashierless Store to Open After Delay” by Laura Stevens, “Nearly a year after it was promised,” Amazon is opening its first Go Store, which is “located in Amazon’s main headquarters in Seattle”. The article discusses the reason for the delay: “the technology proved more difficult to master than expected.” Describing the store’s high tech features, the article explains, “Amazon Go uses cameras throughout the store to track shoppers” and “cameras are also pointed at the shelves to determine interactions with goods.” However, as the article points out, Amazon Go “doesn’t use facial recognition.”

In conclusion, both traditional retailers and online powerhouse Amazon are signaling that bricks-and-mortar retailing is not dead. Yes, physical retailing is changing, but it still has an important role to play.

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