Anyone who has walked around a mall in the United States lately or subscribes to any of the usual restructuring newsletters can’t help but wonder whether traditional, store-based retail as we know it will find a way to survive. Is this phenomenon limited to the United States, or is the retail industry facing a global restructuring of its entire business model?
The name of the INSOL panel, Retail disrupted. Welcome to the Hunger Games, by itself suggests the answer to this question. Three panelists discussed the global state of retail and “the cutthroat game of getting in front of the consumer”: James Stewart (Ferrier Hodgson), Cory Lipoff (Hilco), Iain Nairn (CEO of Kikki.K), and Dr. Ian Tho (Azurium Analytics).
Some of the most interesting points were the impact of technology disruptors (referred to as “Game of Phones”) and business disruptors (including Uber, Alibaba (no inventory), and Facebook (no original content)) on the retail model. Mr. Nairn identified one of the strategies for a successful retailer as “finding a brand with a purpose” – one that engages with the customers and “helps consumers live a better life.” Moreover, the effective use of big data to know what the consumer wants before he or she even realizes it becomes critical to staying ahead of the market. Dr. Tho conducted an experiment with the audience, which he used to point out quite effectively how retailers often “miss the gorilla in the room” and get it wrong when interpreting data. Mr. Lipoff brought home the distress that is occurring in the U.S. retail market, providing the case study of Aéropostale’s Chapter 11 case.
The focus of the panel remained on distress in the U.S. (and the success of non-U.S. brands), so the state of global retail remains undetermined. What remains to be seen are which companies will be able to survive the crisis and who will be able to capitalize on the opportunities presented by the current state of retail distress. Today’s panel helped provide some guidance on how to navigate through the current environment.