There will be blood…

Wall St @ Fashion Ave

As with any war, there will be winners and losers.

The stunning advances in technology over the last decade have changed the way we live. Indeed, as I write this, I sit in a local New Jersey library that can’t possibly be expected to exist in its present form 5 or 10 years hence. The pleasant young lady who is dutifully finding the exact alphabetical homes for her cartload of books will make a nice model for her wax figure likeness that will grace the Smithsonian in their “American Library, ca. 2015” exhibit.

It’s an exciting time to be alive and to attempt to assemble the pieces into a vision of the future, in this case the future of fashion and retailing. Of all the mega change-drivers inherent in this technological revolution, I believe TRANSPARENCY is the single most powerful. Consumers are armed (barcode scanning for best available prices in real-time in front of a salesperson!) and dangerous (click, I just bought it from Amazon…with free shipping). Market players not informed and adapting will see their fortunes inexorably decline. A new war for share of wallet is well underway.

The casualties began on Main Street. The first assault was from outlet stores and big box stores, with Main Street defending its position with superior location and service. The encroachment continued with weapons of proximity (Saks Off-Fifth is now as accessible as Saks Fifth Avenue), followed by a massive air, i.e., online, attack. This relentless assault is from the superpowers of the industry – Amazon, Zappos, Macy’s, Home Depot, Apple and every other brand and retailer, regardless of location.

Who will survive and who will thrive? Those most clearly in the crosshairs are the intermediaries, i.e., wholesalers, distributors, even salespersons, and this will drive ever more vertical integration. Next on the list are retailers who seek full traditional markups on products that are not exclusive and can be found at any legitimate online retailer for less than full price. Consumers (most, never all) are less willing to pay for service and convenience when they are explicitly aware of its cost, and today’s technologies instantly provide just that.

Although the exact outcome is unclear, one thing is certain. For those who remove their heads from the sand too slowly, confident that the tried and true traditional ways of doing business will prevail, there will be blood…

Lawrence DeParis teaches SXN 130: How to Think Like Your CFO.