How technology is changing everything

PHILADELPHIA—Think differently and expect the impossible. That was the underlying message at the Shop.org Digital Summit 2015 keynote session on exponential organizations.

The top 25 retailers in 2009 have lost 2 percent of their concentrated share of the market. But this time, it's not coming from consolidation.

"It's not the big guys getting bigger, it's the smaller guys eating into the share," said Kasey Lobaugh, principal and chief retail innovation officer at Deloitte, at the Shop.org Digital Summit 2015.

The competition in retail is not solely clicks versus bricks. Instead, technology is driving competition in all directions, Lobaugh said.

In 2012, 5 percent of in-store sales were influenced by mobile. Just two years later, 28 percent of in-store sales were influenced by mobile, and 49 percent were impacted by digital overall, according to Lobaugh. Thus, retailers cannot only think about e-commerce, or putting an e-commerce platform on mobile, but must shift perspectives and investments in digital to a more holistic view.

"We have never seen so many technologies moving so fast, doubling in their capabilities," said Salim Ismail, executive director of Singularity University and former VP at Yahoo. Experts across various industries are not even predicting or tracking this exponential rate of change.

He noted the test of the self-driving semitruck in California, and how self-driving vehicles are predicted to increase the capacity of the road by 10 to 15 times. Another next big thing are drones as delivery vehicles. These technologies are going to have "a profound effect on retail," Ismail said. 

Another technology sure to impact retail is 3D printing. Ismail predicts the technology will heavily disrupt the supply chain and the retail industry within the next five years.

"Technology takes something that is scarce and makes it abundant, and something that is expensive and makes it cheap," Ismail said. "Rather than selling scarcity, [exponential organizations] are tapping into abundance."

He points to Uber and Airbnb as examples. These companies take something in abundance—people with cars and empty bedrooms—and acquire customers at no cost, essentially dropping the cost of supply. By the end of the year, Airbnb is poised to be the largest hotel chain in the world without even owning a hotel, according to Ismail. 

So how can retailers tap into the world of abundance? Ismail warns not to change the core of the organization, but instead create a small team to "disrupt an outside market." Case in point: Apple's task teams that have now conquered markets from music and tablets to watches and, allegedly, cars.

Lastly, Ismail said brand—and a consistent brand—becomes even more important to help shoppers navigate between the ever-important physical retail experience and the exponentially-growing digital one. 

See all FierceRetail's Shop.org 2015 coverage.

Related stories:
Kroger tests out 'smart shelf' technology
Amazon eyes Uber-like delivery
Uber testing retail delivery
Target open to Uber delivery
37% of shoppers compare price via mobile while in-store

 

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