There’s no question about it — today’s retail landscape is undergoing a digital revolution.
With the online world enabling individuals to more easily start their own businesses, we’ve seen the likes of Etsy, Warby Parker and Dollar Shave Club come onto the retail scene. These products and services have effectively removed the middle man and enabled a more direct sale to consumers.
The issue that has developed over the last few years as a result of this direct-to-consumer (D2C) eCommerce approach is the effect it has had on more traditional, legacy retailers. As we’ve seen, the combination of both DTC and advanced technologies are forcing the retail industry to either adapt or risk being left behind to file for bankruptcy.
Over the last few years, quite a few legacy retailers have begun to up their digital game through integrating it into their brick-and-mortar locations and devising ways to enhance the online shopping experience.
One of the latest examples of this has been women’s fashion merchant Bebe. In news we reported on earlier this week, Bebe has had a rough time and was in danger of shutting down all of its locations along with filing for bankruptcy protection, but it made the strategic decision to partner up with Global Brands Holding Group Limited. Through this partnership, Bebe will be relaunching its platform, its direct-to-consumer division and its international operations.
Just as recently as last month, we highlighted the need for traditional retailers to ramp up on digital in order to survive. With Macy’s and Kohls’ shares down 20 percent alongside J.C. Penney’s nosedive of more than 30 percent, the need to restructure to compete on the same level as D2C is clear. We’ve seen several store closures announced for the above companies as well as Sears and Kmart.
While Sears has partnered up its Shop Your Way loyalty program with Uber to encourage users to participate and collect points, J.C. Penney has digitized its eCommerce distribution centers and is actively working toward using data to enhance the shopping experience. These efforts may or may not be enough to save these longstanding brick-and-mortar merchants.
Stores like Sephora have made the decision to intertwine digital directly into the in-store experience. To meet the demands of today’s tech-savvy consumer, the beauty brand has begun to incorporate digital signage and iPads for a more interactive shopping trip.
From restaurants like McDonald’s installing self-service order touchscreens to Amazon moving into the grocery industry with its Whole Foods acquisition, it seems like most any retailer today is working hard to stay afloat in the digital revolution, while having a more direct interaction with consumers.
In a sense, all of these traditional merchants are hard at work adapting and learning ways to survive in today’s digital retail revolution.
News for the retail direct-to-consumer sector this week include the likes of Nike and Time Warner taking unique approaches.
While Nike has announced its plans to lay off 2 percent of its workforce, it is combining its D2C retail channel and its Nike+ digital products business. The overall goal here is to more quickly service its customers in a more straightforward fashion, and this will probably help boost its bottom line.
Rather than relying on cable networks, Time Warner is investing $100 million directly with Snap Inc. to produce TV shows and advertising. Through this process, Snapchat users will begin seeing more of their favorite shows, and maybe some new content, on the disappearing mobile app service.
For direct-to-consumer companies, it seems that the name of the game is to streamline products and services by bypassing the traditional retailer supply chain route. This may create an issue of what could happen once companies have direct control over their offerings and no longer rely on third-party distributors or vendors.
One thing is for certain: Digital may be the vehicle of today’s retail arena, but the direct-to-consumer approach is the driving force.