The Retail industry is no stranger to “creative destruction,” the economic process, coined by Joseph Shumpeter, of “industrial mutation” which “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Many have heralded eCommerce as the next disruptive force that will recreate Retail by obliterating bricks-and-mortar stores. Indeed, for the last 15 years, the online onslaught of “store-less” titans like Amazon and Netflix have in fact decimated neighborhood icons like the bookstore, the record store and the DVD rental.
However, as I have argued before, the new “trend” in technology does not have to be simply destroy and replace. Rather, when innovative leaders can cross-pollinate disruptive technologies into traditional industries, there can be evolution and not just revolution. This is precisely what is happening in Retail today. While the industry is certainly undergoing massive disruption, the transformation will not lead to just a pure virtual commerce existence. Rather, the strong benefits of online, which come mainly from digitization, will be married with the very human need for physical and local experiences to create a more efficient and more wonderful shopping experience. This is a win for the consumer, and for the new breed of retailers that will digitize all aspects of their business but use this to understand and be where consumers shop. They will be able to better meet and exceed customer expectations and create a differentiating value proposition that leads to an overall better brand experience and longer term sustainable profitability.