coOXFORDSHIRE, United Kingdom — 8,642. The number appeared unambiguously on the first slide of a presentation by Doug Stephens, retail industry futurist, founder of Retail Prophet and author of “Reengineering Retail: The Future of Selling in a Post-Digital World.” 8,642 is the number of stores closed this year in the US in what Stephens dubbed a “retail apocalypse.”
The source of the disruption was no secret. In 2016, e-commerce accounted for a whopping $1.9 trillion in retail transactions, said Stephens. On Singles Day, China’s Alibaba did $8.6 billion in online sales in 24 hours alone, he continued. And if that didn’t register with a fashion industry that has been slow to embrace e-commerce, Amazon is set to become the number one seller of apparel in the US by the end of 2017, Stephens added. “This is the end of the beginning of e-commerce,” he said.
E-commerce is being reshaped by everything from subscription models to conversational commerce to 3D printing, noted Stephens. But what of physical stores?
As the world becomes more and more virtual, people increasingly crave physical experiences. As a result, the store won’t die, said Stephens. But in order to survive, they must change. “Media is becoming the store,” he said, pointing to the rise of online product experiences. “As a result stores must become media… stores are the most powerful, measurable, manageable form of media that a brand has at disposal.”
“Stores can’t be just about distributing products,” he explained. “They need to be about distributing experiences — less stores, more stories,” he continued, citing successful examples from Sonos, Bandier, Apple, Nordstrom and Sneakerboy. That means putting less emphasis on shopping and more emphasis on entertainment, hospitality and community.
“Experiences with friends are what plays well on Instagram — more than products,” noted Stephens. “Why can’t communal experiences and shopping come together?” he continued, suggesting a new formula for retail: community plus a great physical environment plus great products.
He ended with an amusing analogy, showing a slide of a basic London bus stop. “This is retail for the last hundred years — functional,” he said, before flashing up a slide of a new model bus stop in Montréal, featuring playground-style swings. Infinitely more experiential, communal and fun — what retail must become to survive.