Retail is “broken” for multiple reasons, says Pilkington. The last five years have seen the industry experiencing the e-commerce revolution, the rise of social media and user reviews, a shift in the balance of power from producers to consumers, and generational changes. Then came COVID-19, resulting in lockdowns, store closures and multiple bankruptcies. Today, Pilkington says, “successful retailers are the exceptions rather than the rule.”
Taken together, those trends have spurred a rethinking of retail industry models. With the shift toward the omnichannel, the traditional distinction between wholesaler, retailer and e-trailer is breaking down. In the future, Pilkington says, the notion of “brand” won’t be tied to any one of the roles, but instead will be a “free-floating” concept with the goal of optimizing sales across all channels. “I think we’ll reach a new equilibrium,” he says.
By no means do these changes signal the end of brick-and-mortar stores. But the days of traditional shopping centers and big-box stores might well be numbered. Pilkington predicts that physical stores will be smaller yet offer much higher levels of customer service, while online merchants will handle the task of processing stock and ensuring that inventories are in place.
Amazon.com will continue to be a dominant force in retailing, but it won’t be the only successful player, Pilkington believes. Both traditional retailers and startups that embrace the multichannel model, while entering into a more dynamic relationship with customers, will hold their own. “It’s going to continue to be competitive,” Pilkington says.
