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The Big Shift: Power to the Purchaser
Sorry stores, it’s no longer about you. Retailers have long dictated shopping terms to consumers: how, where and when you can buy something. But “store hours” are becoming a thing of the past. So, too, is the middleman. “I can go directly to the retailer, get great insights prior to that purchase – and it’s cheaper,” explained Finkelstein.Social Selling
The old mall map has been replaced by social media channels that can guide you through a personalized shopping journey, informed by your habits, preferences and friends. “What social media has done from a marketing perspective, is level the playing field,” explained Finkelstein. Which brings a whole new meaning to You Are Here.Side Hustles Go Mainstream
Celebrities like Jenner, Kanye West and Drake were quick to seize on this opportunity, knowing social commerce would allow them to monetize their massive fan bases as old business models – music, for instance – fade. The resulting celebrity product lines have helped launch a whole new side of retail, known as “side hustles.” Case in point: Finkelstein described an investment banker who uses Shopify to sell homemade jam made from lemons on his hobby farm.Playing With the Platforms
Online platform giants like Amazon, Facebook and Alibaba enjoy an unparalleled scale and cost base. For everyone else, that means an even greater need to create a unique ecommerce value proposition. Forget commonly available products. Think cool brands, unique experiences (online and offline) and personalized relationships with customers. “You have to create value,” said Finkelstein.Paying How You Want
When it comes to payment, Finkelstein believes retailers should accept the payment that’s preferred by customers. Full stop. He pointed out that Shopify was one of the first to accept bitcoin, with rapper 50 Cent selling his branded headphones via Shopify and accepting cryptocurrency as payment. “We as a retail industry should be agnostic as to how people pay.”The Many Cultures of Commerce
When selling online to a global audience, knowing the culture is key. “Each country and each region has these really interesting nuances. The idea of using a credit card to pay for a transaction online in India is unheard of. You have to use a ‘cash and delivery’ type of model,” explained Finkelstein. In Indonesia, retailers have sold through Instagram for years, and now use social media in very different ways from North America. While in the U.S., “everybody is used to next-day delivery. Most countries don’t expect that. In Brazil, you just want to receive your package.”The Big Q: Is Traditional Retail Dead?
The short answer: no. That is, if retailers can create great, customized experiences that are unique to their store offerings and to the customers they’re targeting. In other words, it’s not just about product and price. It’s about the experience and emotion that shoppers attach to a brand. Some clothiers, for instance, offer espresso and hot shaves to customers who visit their shops, perhaps after browsing online. Others are starting to offer Augmented Reality tools that let customers visualize products on them, to get a smart read on sizes and cuts. There’s no denying the retail industry is in a state of mass disruption, with over 5,000 stores in the U.S. closing their doors last year. But Finkelstein believes that chance will create greater opportunities for Canadians seeking a slice of the global market. “Canada is becoming a lot more ambitious. We are fiercely Canadian but we are becoming fiercely ambitious with our companies.”This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. The reader is solely liable for any use of the information contained in this document and Royal Bank of Canada (“RBC”) nor any of its affiliates nor any of their respective directors, officers, employees or agents shall be held responsible for any direct or indirect damages arising from the use of this document by the reader. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates. This document may contain forward-looking statements within the meaning of certain securities laws, which are subject to RBC’s caution regarding forward-looking statements. ESG (including climate) metrics, data and other information contained on this website are or may be based on assumptions, estimates and judgements. For cautionary statements relating to the information on this website, refer to the “Caution regarding forward-looking statements” and the “Important notice regarding this document” sections in our latest climate report or sustainability report, available at: https://www.rbc.com/our-impact/sustainability-reporting/index.html. Except as required by law, none of RBC nor any of its affiliates undertake to update any information in this document.