The days of retailers calling the shots are gone; technology has put the customer in charge, said longtime retail analyst/consultant Walter Loeb.
In a column for Forbes on Tuesday, Loeb said retailers are undergoing a transition in which they now must meet the needs of specific customers rather than interacting with consumers on a market level. “Accepting the influence of technology is critical for the retail industry to remain vibrant,” he noted.
According to Loeb, technologies that are making shopping easier and more engaging include digital wallets (he cited Apple Pay), robotics, personal recognition, artificial intelligence and consumer analytics, among others.
“I have always believed that a strong merchant can shape the image of his stores and the future of his company. Now this merchant must also be a technocrat,” Loeb wrote in Forbes. “He must accept omnichannel retailing as a new force, even though the cost factor may squeeze the profit margins.”
This change of focus is illustrated by Walmart’s $3.3 billion acquisition of e-tailer Jet.com this week, Loeb said, describing the deal as “especially noteworthy, since management now believes it can do more business on the Internet.”
For retailers, reduced inventories, leaner operations and management, a sharper focus on core merchandise and brands, and partnerships with other vendors, among other changes, will be the order of the day to successfully navigate the omnichannel waters, he explained.
“The most difficult challenge is that a significant amount of online sales are coming from low-margin staple merchandise,” Loeb noted.
Millennial and Generation Z customers have embraced digital shopping channels, to be sure. But these consumers aren’t ready to abandon brick-and-mortar stores — they’re going to buy whichever way best suits their needs, according to Loeb, who said 58% of Gen Z customers want to shop in stores.
“Technology is reshaping how consumers shop. Retailers that resist the changes coming about will not survive,” he wrote. “Those that embrace technology and let the customer be in charge will thrive.”