Scott Galloway predicts the future of retail
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Earlier this year, Scott Galloway predicted that Amazon would buy Whole Foods — ahead of the actual deal being announced. His new book, The Four: How Amazon, Apple, Facebook and Google Divided and Conquered the World explores the effects of the companies in retail and tech, and what their domination means for the future of retail.
“The rumors of the death of the store are greatly exaggerated,” Galloway says. There are just too many stores, he says, and people have combined that with the idea that stores are “obsolete. It’s just not true.” Successful retail models that have evolved with the consumer are those with a focus on creating experiences and providing expertise.
Galloway, a clinical professor of marketing at New York University’s Stern Business School, joined the Retail Gets Real co-hosts at NRF’s Shop.org ecommerce conference in Los Angeles to discuss the so-called “retail apocalypse” and make another guess at what’s next for Amazon.
“Consumers are no longer going to the store for product, they’re going for people,” Galloway says, pointing out Starbucks as an example of a company with “happy employees” who translate to happy customers. “You’re going to see rationalization of square footage,” he says, “but you’re probably going to see more cost or more investment per square foot in the ones who survive.”
Galloway is a consultant to many ecommerce companies, and says one of his first pieces of advice is often “open a store.” The challenge is to attract the best talent and keep them so happy that they remain. Galloway encourages what he calls investing in “organic intelligence” — focusing on human capital. “Starbucks now spends more money on benefits than they spend on coffee beans,” he says. “Your ability to recruit the best and brightest is kind of the game, full stop.”
As for what’s next for Amazon, Galloway predicts that voice technology is the one to beat. With devices like Alexa already in place, Amazon can use purchase history, artificial intelligence and their extensive fulfillment network to take care of “tedious, monotonous, low-consideration, low-value purchases, which is about 90 percent of retail,” he says.
Listen to the episode to learn how other retailers can adapt to the big four companies’ powerful hold on the industry, and why Galloway makes the predictions he does. Subscribe to Retail Gets Real for more intriguing interviews.
Katie McBreen is one of NRF’s co-hosts on Retail Gets Real. Meet all the co-hosts and learn more about the show.