SAN FRANCISCO—In the heyday of mass merchants and hypermarkets, the philosophy was bigger was better. Walmart, Target, Kmart and the clubs were in a race to build ever-larger footprints to hold increasingly larger assortments.

Indeed, before the age of Amazon, big box stores were the category killers, creating destinations to draw the masses. But today, the big retailers are focusing on ever-smaller stores.

On this Cyber Monday, Bill Friend, managing director and vice president of North America with Fluent Commerce, shares insights into downsizing, Amazon's effect, the influence of the cloud, and what's next for retail and e-commerce in this exclusive.

GlobeSt.com: Why is downsizing of retail stores and/or going smaller the biggest trend in the retail industry for 2019?

Friend: Downsizing represents a significant growth opportunity for the big box retailers who can no longer endure the costs associated with maintaining larger. High rental prices, increasing inventory costs and wages have created a new standard for retailers. As the convenience of online shopping increases, retailers need to strategize a more thoughtful approach to entice consumers and increase foot traffic in-store.

Additionally, having full support for omni-commerce, in which shoppers can enjoy click and collect for online purchases, is key. Businesses should be purchasing from a broader assortment–one that is simply shipped to the home after a purchase is made in store, and acts as instant gratification for the consumer. This not only works to increase customer satisfaction, but to also build brand loyalty among the consumer.

In this approach, retailers do not have to maintain extensive inventory and are still able to convert the sale by simply offering free home delivery. This type of strategy is particularly helpful for bulky items that can simply be shown as pieces on the floor and for the consumer to confirm preference.

GlobeSt.com: What effect has Amazon had on this phenomenon?

Friend: While Amazon has certainly created a high level of comfort and broad adoption of online shipping trends, it's an evolving paradigm. There is still an expectation of competitive price, but it's much more about convenience for those who need things quickly and are not looking for the in-store experience. That being said, the vast majority of shopping still happens on the ground itself.

The combination of in-store and online shopping is still the winning paradigm, which is why it's important for pure play retailers to continue to support brick-and-mortar locations. Retailers with a historically large in-store only footprint, which then move to an optimized heterogeneous network and can tie-in the online experience, will ultimately have the most success navigating through these changing times.

GlobeSt.com: How does the cloud allow companies to order products, manage orders, process refunds and shipments so retail locations are smaller?

Friend: Consumer expectations continue to rise around product availability and convenience, both from an online and offline perspective. Retailers need to be continually working to up their games as it relates to delivering personalized experiences to VIP clients, as well as converting new shoppers into VIPs. This requires more agility than they have been able to achieve from the legacy systems that have been around for the last 15 years.

While these systems are now available in the cloud, they were not built from the ground up to take advantage of true cloud computing. They do not scale dynamically and are not nearly as agile as cloud native solutions that can very quickly accommodate new requirements on a weekly basic. Modern cloud solutions can quickly deploy new experiences to support emerging buying trends in real time.

GlobeSt.com: What's next for retail and e-commerce?

Friend: Commerce, like life, is a journey not a destination. There is no end state but an evolutionary tale that is not likely to see revolution any time soon. It will be less generational, meaning every consumer will have an expectation of transparency and convenience when it comes to shopping. It will not matter if you are 85 or 15, commerce is commerce. I want what I want, when and where I want it.

Instant Insights /

It's Cyber Monday, But Majority of Shopping Remains In Store

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