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Comment: Pure-play and traditional retail channels blurring

As the channels blur into one continuous shopper journey, to ensure they continue providing a customer-centric, channel-agnostic shopping experience, retailers need to focus on the consumer not the channel. This is leading to the concept of a pure-play or traditional retailer becoming irrelevant, particularly to the consumer.

It is just commerce, facilitating how consumers shop, and how goods are distributed to them. What is increasingly relevant however, is a retailer’s ability to respond quickly and effectively to the rapidly changing e-commerce market and consumer. It is here where some distinct differences between a pure-player and traditional retailer remain, for now at least.

Pure-players are nimble, able to swiftly and effectively adapt to the ever-evolving eCommerce environment, placing them in an enviable position. It is not just that pure-players are innovative; it is that they do it at speed. A key factor enabling rapid innovation is those working at pure-play retailers tend to be digital natives. They’ve grown up with technology and are able to keep pace with the latest, and importantly emerging, trends. But more than this, they have the entrepreneurial spirit and confidence to exploit them. With tech-, internet-savvy employees, who understand the business strategy and the technology needed to achieve it, every department works collaboratively to achieve business objectives. This makes pure-play retailers more digitally capable, and it is their culture that enables rapid change, and embraces it.

This is not always the case for traditional retailers, who often have to deal with legacy cultures. This slows the business down as it tries to nurture the necessary digital corporate culture needed to be digitally capable. From store managers balking at new practices or technology required to provide customers with seamless shopping experiences, to board members questioning the need to invest in social media, the result is a divided retailer, one part moving into the future, the other clinging to traditional sales channels. Overcoming such barriers is not something a young, entrepreneurial, pure-play retailer has to endure.  

With mobiles and tablet computers becoming a vital component to the shopping journey, retailers need to have technically capable people at the core of day-to-day operations. Many pure-plays, having built their propositions from scratch, enjoy a fit-for-purpose, green-field, single channel, technology environment that facilitates change. In sharp contrast to this are the legacy systems many traditional have, which not only constrain them in terms of technology integration, but in getting the entire business behind the cultural changes needed to effectively implement it. Such internal battles slow down innovation and its implementation.

As retailers and brands no longer control the conversations and the media no longer its distribution, negotiating this brave new world requires a savvy marketing capability and closer links between a retailer’s marketing and technology arm. For pure-plays, this is seen as the norm, with social media used to engage, interact and most importantly, influence spending decisions. For many traditional retailers it can necessitate a shift in culture, thinking, defined roles, and even the need to build the required digital capabilities.

For most pure-play retailers, digital capabilities are part of their DNA. Whereas in some instances, traditional retailers are only just starting to look at essential digital roles, such as IT and supply chain managers as more than just operational, but board level positions. In changing this mentality, traditional retailers are ingraining digital capabilities into their business, while creating an innovative, entrepreneurial environment that better facilitates change, and the rapid adoption of it. This fundamental shift is helping level the playing field in terms of quickly and efficiently responding to the rapidly changing eCommerce market.

Traditional retailers are also quickly implementing in-store innovation in an effort to exceed pure-plays by providing personalised, seamless offerings that create value added experiences. Stores are essential in providing this, and as such it is here that the next retail revolution is likely to occur. Many traditional retailers are employing tech- and digitally-savvy staff, training them to deliver exceptional service, and arming them with the tools of the digital age so they can best serve the digital consumer. This is accelerating the cultural shift within traditional retailers. Slowly but surely, traditional retailers are evolving to a culture comparable to a pure-play.

As the channels blur, pure-play and traditional retailers are becoming increasingly aligned in terms of digital capabilities and philosophies. Both are embracing technology, social media, and seamless shopping experiences. Going forward they’ll need to constantly adapt to the ever changing eCommerce market through rapidly implementing innovation. While the differences between the two are diminishing, with the next retail revolution set to come from stores, if they are to compete effectively, maybe it’s now pure-players that require a cultural evolution in terms of retail disciplines and structure. Vive La Revolution….

Planet Retail's Malcolm Pinkerton writes a regular eCommerce column for Essential Retail.

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