I was recently invited to speak to a group of entrepreneurs in Singapore, and searching for a topic that might be of more general interest, I decided to ask the question of whether retail is dead? I broke my presentation into three parts: the case against retail; the case for retail; and the implications of the new reality of retail – you can access the slides here.

Why traditional retail might be dead

Given the massive volume of words written weekly on the subject of digital, e-commerce and mobile, you could easily be forgiven for thinking that the blogosphere has decided that bricks and mortar retail is dead. Here in Asia there is loads of evidence suggesting we love online shopping.  Asians want to shop online – a recent survey by Nielsen suggested that intent to shop online in the next three months ran at over 30% for apparel and travel and more than 25% intended to buy phones, food and beauty products online in the near future. In China, T-Malls’ recent Singles Day promotion overwhelmed couriers all over the country as more than US$3 billion dollars of sales were recorded in a single day.

Given the massive volume of words written weekly on the subject of digital, e-commerce and mobile, you could easily be forgiven for thinking that the blogosphere has decided that bricks and mortar retail is dead. Here in Asia there is loads of evidence suggesting we love online shopping.  Asians want to shop online – a recent survey by Nielsen suggested that intent to shop online in the next three months ran at over 30% for apparel and travel and more than 25% intended to buy phones, food and beauty products online in the near future. In China, T-Malls’ recent Singles Day promotion overwhelmed couriers all over the country as more than US$3 billion dollars of sales were recorded in a single day.

With 44% of the world’s internet-connected population, and with the world’s largest and fastest growing middle class population, there’s no doubt that more and more Asians will shop online in the coming years. This is reshaping the Asian retail landscape, especially in China where brands like T-Mall, Yihaodian and 360Buy are vacuuming up larger shares of the market (and complicating brands’ e-retail strategies!). At a more micro-level opening an online retail site today is practically free, so more and more sole traders are moving to supply products this way. There is no doubt that this will hurt regular retailers – the demise of many retailers in US and Europe has proven this to an extent.

So IS retail as we know it dead?

You had better hope not! Retail is probably the biggest business on the planet; consider the following:

• There are probably well over 65 million shops in the world
• It is estimated that retail sales account for nearly 20% of global GDP
• The world’s biggest retailers account for fully 7% of the total retail sales and have more than doubled in size in the last decade
• Retail is the world’s largest private sector employer – Wal-Mart alone is the world’s 3^rd largest employer after the US department of defense and China’s PLA and more than 3 million Americans are employed in independent retail alone.

It’s a stretch therefore to right-off this industry as being dead; especially when much shopping is done in physical stores. Forrester (the research company) reckon that 90% of all retail sales in the US are in regular stores and a tiny proportion of the world’s grocery sales are made online. In actual fact we love shopping in stores; here in Asia the volume of traffic in malls, hypermarkets and traditional wet markets is consistently high. In Asia grocery shopping online is tiny: a recent survey published by Bergent suggests that just 1% of Korean and Singaporean housewives shop for groceries online and that none do in Japan, Hong Kong or India.

So no, retail is not dead. But, it has changed!

A different way to shop

The biggest impact of the internet revolution on retailing is not so much where we shop but how we shop. It used to be possible to clearly define the aspects of the marketing mix that influence us as consumers of a product and those that affect our behavior as shoppers. Traditionally the former happened outside the shopping environment. But today, the use of connected devices runs through almost every aspect of our lives. This exposes us to millions of targeted messages that form and influence what we want to concern and how we will buy almost concurrently. Effectively we are always shopping!

The likely reality is that multichannel retail will become much more normal – a true combination of clicks and bricks. Some savvy retailers have already adopted this model: Debenhams, the UK-based department store has been tremendously successful in blending  a compelling in-store offer with an online one, and online players like Ebay have begun to capitalize on the love of retail space by using pop-up stores.

A new marketing model

With so many changes afoot, manufacturers could be caught napping and that could have some very negative impacts. This requires a change in the way we think about marketing. Today, marketers who have a superior understanding of the segments of consumers and the shoppers they are chasing get ahead of their competition. So these marketers have moved away from a singular focus on the consumer and now consider a more complete view of the world.

We call this broader view ‘Total Marketing’. This model looks at the relationships between consumers, shoppers and retailers to define the best way of driving growth efficiently. Our new book The Shopper Marketing Revolution explains why this new model is so important, introduces the key concepts that underpin it and provides a field guide to individuals who want to apply it. You can buy the The Shopper Marketing Revolution at Amazon  now.