SAN FRANCISCO: There will be a fundamental restructuring of retail real estate over the next two years and retailers must have an omnichannel strategy or they won't survive, the president of eBay Marketplaces has predicted.
Speaking in a series of video interviews with management consultancy McKinsey, Devin Wenig said that technology is now so pervasive and useful that "we're past the tipping point", so that the worlds of e-commerce and commerce have now merged.
"Now, every merchant, every retailer must have an omnichannel strategy or they won't survive. That's very different than even just 24 months ago," he warned.
However, the emergence of online shopping does not mean that physical stores will die out, he explained, because many consumers simply enjoy the entertainment and engagement of the shopping experience.
But physical shops will have to adapt, he said, to become more like distribution and fulfilment centres where the showroom has a much smaller proportion of the footprint with more space given over to inventory and distribution. And this will happen much more quickly than people realise.
"Within 24 months, you will see a fundamental restructuring of retail real estate," he said. "You will see distribution centres, local economies, technology-enabled shopping, and a very different approach toward how you engage with the consumer."
"I suspect that within 24 months, no one will have a mobile strategy. They'll just have an omnichannel, connected-screens strategy," he added.
An intelligent approach to data will also be essential for the future retailer or e-commerce business, he forecast, because data can connect this "exploding" inventory and selection to the consumer experience.
But small data that connects with the individual is most important of all, he said. A consumer doesn't want to be part of a big data set - he or she is "just looking to buy a shirt".
Small data, he explained, is "about understanding insights that I can glean about you that don't feel intrusive, don't feel creepy, and feel artificial – but feel natural. That to me is the future".
Data sourced from McKinsey; additional content by Warc