Businesses that remain static die. Traditionally, retail has been a business that has always been slow to evolve but certain accelerating world changes are forcing retailers to adapt to these changes in order to remain relevant and profitable.

A distinction must be drawn between small or independent retailers and the “big-box” retailers. Small size retail operations are typically started by enterprising individuals who find niche markets or underserved locations. These retailers mostly stay as a single unit operation run by individuals or at most grow to a few units if successful and depending on the ambitions of the owners. These operations are typified by the owner’s vision and their customer service ethics. In contrast, big-box retailers are run on a very large scale – a large retail chain often having hundreds to thousands of outlets. The mantra for the big retailers is to take a formula that works and replicate it on a large scale multi-fold. Economies of scale and supply chain efficiencies are the driving forces. All big retailers start out with customer service as one of their prime commandments, but that sometimes gets lost over time, buried under spreadsheet math driving efficiencies and profits.

When discussing the state of retail, the big elephant in the room must not be ignored: i.e. the politico-economical state of the World. Without going into long-winded details and analysis, the obvious conclusion can be stated: uncertain and changing economies require retail to be nimble to survive and to thrive. Small retail will be the most nimble, yet most susceptible to the demands of fitness. Hence some small retail will die and some will evolve and thrive at the expense of others. No need to invoke Darwin explicitly here. Axiomatically, even though having greater staying power, the big retail could be The Titanic, slow to change direction and therefore vulnerable in a fast changing world.

Cultural changes are also afoot in the consumer world. Where not driven by the ubiquitous internet serving up information and affecting buying decisions, more and more consumer purchasing is driven by emotional appeal and a feeling of being catered too. Changes in economy notwithstanding, this consumer purchasing is a hallmark of rising living standards and increased expectations. Consequently, shoppers are increasingly drawn to retailers that present a more intimate boutique type of shopping experience without the accompanying higher prices.

Creation of an intimate but exciting shopping experience requires creation of small sized groupings of merchandize arranged by unique points of interest. Grocery stores are moving in this direction by breaking up the center of the store into islands of categories. Department stores are creating “markets” within their expansive floor areas to generate excitement. In addition, dynamic promotions and pricing are instituted to showcase and spotlight different merchandize every day or even during different times of the day. Store associates are being freed up from mundane tasks that can be automated and being assigned as expert stewards of these “islands” to greet and mingle with the customers.