Nick Hutchison reviews Steve Dennis's Remarkable Retail, arguing the retail apocalypse narrative is overblown. E-commerce is only 11% of U.S. retail sales and unlikely to hit 25% in a decade. The real threat is the vanishing middle, where undifferentiated retailers get squeezed between Amazon's low prices and luxury brands' high margins.
Chapters
Hello, Book Thinkers family! Did you know that retail is dying? They're calling it the retail apocalypse. Well, that may or may not be true. We are going to answer that question in this video though. Today's book tip is going to come from Remarkable Retail by Steve Dennis. The subtitle of this book is How to Win and Keep Customers in the Age of Digital Disruption. And then Seth Godin has a testimonial. Seth, by the way, is a marketing genius. I've read 3 or 4 of his books and I really like what he has to say. Seth says, quote, required reading for anyone who runs a store or shops. And when I saw this book, I was very interested because I'm going to get into the retail space, but I don't know anything about it. And so as I was going through this book, it actually took me a little while to read because I was learning so much. This isn't an area of business or personal development that I knew anything about, but I found myself pretty much educating everybody else around me and circling statistics and texting them to friends. And there are a lot of epiphanies that I had about the retail space because in general media or mass media, there are a lot of clickbait things like retail apocalypse that we just take and we think that they're true. We absorb those things and then they become part of our expectations of online retail and how it's Amazon is taking over the world and things like that, which May or may not be true. We'll see as they continue to acquire companies. I wanted to start with the word disruption because right here the subtitle says, How to Win and Keep Customers in the Age of Digital Disruption. There's a quote that Steve has about disruption that I thought was really interesting. He says, quote, the notion that disruption comes out of nowhere, catching once powerful companies unaware, is rarely true. What's far more common is that brands catch fire slowly, consumer behavior shifts over many years, and most technologies take a while to grab a meaningful foothold. And so that kind of hooked me. I thought, oh well, I thought disruption happened immediately. Now I've learned in a lot of good books that disruption does not happen overnight, but it does happen pretty fast. Well, with all of the physical retail stores, are they going to be put out of business by Amazon? So I kept reading, obviously, and there's another quote right here. It's actually a statistic that floored me. I think I sent this to like 30 people that all work in retail, by the way. It says, quote, another mistaken belief is that online shopping is becoming the dominant way people buy. Well, of course it is. I only use Amazon, right? But in fact, even with the dramatic shift in the past few years, e-commerce still only represents about 11% of total sales, retail sales, in the United States. The portion is expected to remain below 25% even 10 years from now. So how can that be? I really thought everybody only used Amazon and that malls were all closing. And there are a lot of anti-apocalypse statistics in here. I really found it fascinating that physical retail is still alive and well, and there are ways to increase your brand presence, to use physical retail in combination with mobile to be more effective. And if that's something that you find value in, then this is a fantastic book for you. But I'm going to keep reading a little bit here on the next page, and this is sort of one of the major points in the book. He says that the bottom line is that for most retailers, legacy or disruptive, the physical store strategy is And will remain an essential part of creating a remarkable sustainable business. Having a physical store presence, when operated the right way and in combination with mobile, will create a remarkable sustainable business. That's the whole thing here, right? Remarkable retail. Purple Cow, Seth Godin. How do you stand apart from everybody else? If you look out over a field of brown and white cows, there's nothing remarkable. But if one of them is purple, it's going to stand out to you. And so as a retailer, how do you make that happen? Before I read my final bookmark in the book, there's this concept, uh, that the middle of retail is falling out, it's disappearing, and that on one end of the spectrum you have people that compete on price. Well, on that side, it's pretty scary because Amazon's coming in there and they're intentionally losing money in their North American retail and logistics in order to have a monopoly on that side of the spectrum. Why go in there and try to compete with Amazon or Walmart? Like, all of those companies lose money year over year over year on those areas of their business, and they intentionally do that so that they can push other people out of the market. It is very tough to be on that side of the marketplace, whereas on the other side, which is actually still thriving, you have luxury items. You have upscale stuff. And so those 2 ends of the spectrum are doing really well because they stand out. Either you've got the lowest price or you've got the flashiest, most expensive product. It's luxury. But in the middle, it's just a bunch of junk. It's all boring. You can't just be the standard retailer anymore and expect to make it. I think there's another stat. This one I'm just recalling, uh, may or may not be true. Fact-check me. But it said something along the lines of 20% of retailers represent 80% of that middle fallout of all the closings of stores, physical retail locations recently. And so these bigger brands who are just boring and didn't notice that slow progression coming at them, that slow disruption easing up on them for the past 5 or 10 years, those are the ones that are going out of business, not the ones that are reacting and using mobile and things like that. And so I found all of that really fascinating. Normally I would end a video here and say, hey, if any of that was fascinating to you, then buy this book and give it a read because it is absolutely worth its weight in gold. But there is one other thing that I think will apply to a lot of people here, and so I sort of want to run through that. Has to do with a lot of other things that I'm dealing with in my life. So towards the middle of the book, there's a sub— a subsection of a chapter titled What business are we in anyway? And a lot of times retailers, they don't think about what type of business they're actually in, and they, they think about how they deliver their business instead of who their end customer is. So he goes on to talk a little bit about, um, we might think we're in the business of renting a curated assortment of entertainment videos through a large network of neighborhood locations, but then Redbox comes along We might think we're in the business of renting a curated assortment of entertainment videos and DVDs through conveniently located vending machines, but then Netflix comes along. And so my point here is that if you are a business and your end customer wants to buy good valuable books, right, your only mechanism shouldn't be a physical retail location. You should combine a mobile experience with that, and that's exactly what Amazon did. They're online shopping, but they're opening up physical locations. They're online shopping, but they have different ways to deliver that valuable book to you. And so when companies like Borders or Barnes& Noble, they don't catch on to that mobile trend and they think they're safe because the logistics will never work out— well, Amazon chops away and they lose money year after year after year, but they develop a very strategic and proprietary logistics arm that eventually gets you the book in 1 or 2 days. So now all of a sudden, do I want to drive out in the rain or the snow? Do I want to leave my kids? Do I want to do X, Y, and Z, go to a physical store and buy a book? Or can I wait until tomorrow or the day after to buy it? And so what type of business are you in? If you're in a specific business and your target customer is using online, then you need to understand you could still deliver the same end value and product. It's not diluted if you sort of jump into this mobile experience and combine it with your physical location. And companies like Amazon that have just been creeping up for years were able to do that, whereas other companies are now gone. And so there have been a lot, a lot, a lot of closures recently. There are some companies that claimed bankruptcy recently, some big retailers, and that's scary. So mobile is not so intimidating with all the tools that we have available today. Most people start their in-store experience by checking things out online, and you need to be aware of that. So if you're in retail, now we get to this point. Check out this book. It's a fantastic read. Steve, I'm happy that we reached out and connected, and that I was able to get a copy of this book and go through it because I learned a lot, and I'm going to be more aware and smarter and looking for additional opportunities. So it helped me out a lot. Thank you for writing the book. With that, go read something and have a great day. Bye.
