The future of business
The business world is changing at an astounding pace, with some experts predicting that about 65% of children entering grade school today will later work in roles that don’t currently exist. The evolution of technology and online shopping has left many people feeling nostalgic for the experience of patronizing small, locally-owned brick-and-mortar businesses. What does the future hold for such businesses in communities like Westmont? Will brick-and-mortar stores still exist in the future?
“Businesses will need to continue to adapt to online competition,” says Larry Forssberg, Westmont Economic Development Partnership Director and Executive Director of the Westmont Chamber of Commerce and Tourism Bureau. “They will have to be wise in how they compete and careful in selecting the areas where they compete.”
E-commerce has a bigger footprint than ever, with about 40% of all sales happening online. The last few years in particular have seen a rise in online shopping figures, facilitated in part by a 4G network that allows consumers to shop on the go. Westmont businessman Tom Walsh (see cover) believes customer service is the key to competing with the digital domain.
“The biggest thing we have going for us is our reputation of honesty and reputation with our clients,” says Walsh, President and Principal of TW Group, Inc., an independent insurance and financial services agency in Westmont.
“A lot of people start their search online to get an auto quote with Geico or Nationwide, but we find the vast majority of those people say “yes” when asked if they’d like to speak with an agent,” Walsh says.
Walsh notes that insurance isn’t a commodity and prospective customers will still need personal council for the foreseeable future. But what about products that can just as easily be purchased online? It’s possible to imagine e-commerce closing the doors on other types of small, brick-and-mortar stores one day. Surprisingly, however, experts like NYU Marketing Professor Scott Galloway say this won’t happen anytime soon.
“The future of retail looks more like Macy’s than Amazon,” Galloway says. “Pure-play e-commerce doesn’t work for anybody. The world looks more like a multi-channel future.”
Some small businesses try to keep their overhead low with a solely online presence, but these businesses often have too much competition in a digital domain that has become overcrowded and expensive. Businesses today are involved in a costly game of “bidding on keywords against the likes of Amazon and large retailers to land on the first page of search results.” (visenze.com)
“It’s very hard to launch a brand these days that’s just online-only. It’s an incredibly difficult and crowded e-commerce environment,” says Sucharita Mulpuru, a retail analyst at Forrester Research. Mulpuru also notes that there are more than 800,000 online stores competing for customers through the gateway of Google.
Business owners who open brick-and-mortar stores alongside their online presence are able to increase brand awareness and develop a customer base in a space where retail options aren’t infinite. According to Galloway, businesses will need to focus on this kind of omni-channel approach to target their customers and remain relevant in the years ahead. For their part, consumers also want a variety of choices when shopping for a product and an omni-channel approach gives them more options by seamlessly combining digital and physical shopping experiences.
Even insurance agents like Walsh understand the importance of maintaining an online presence. TW Group’s website twgroupinc.com gives a detailed overview of his business’ services and specializations, and includes a video message from Walsh in which he details the history of TW Group and stresses the company’s commitment to customer service.
“My father started the agency when he got out of the Navy in 1946…he built an agency on the principal of taking care of his customers,” Walsh says.
Luckily for Walsh, TW Group won’t need to adapt as quickly as some brick-and-mortar businesses that are struggling for survival in an increasingly digital world. Small businesses offering products that can just as easily be purchased online need to do something extra to bring customers through the door.
“Consumers aren’t coming to brick-and-mortar stores for the prices or the selection,” writes Chris Wadsworth in an article on trafsys.com. “They’re coming for an experience.”
A visenze.com article points to men’s clothing retailer Bonobos as an example of an omni-channel business that offers their consumers a unique experience; Bonobos customers get fitted by “guides” at brick-and-mortar locations, place their order online and get their fitted clothing delivered to their homes. Traditional brick-and-mortar businesses will need to follow the lead of retailers like Bonobos to remain viable in the future.
According to Wadsworth, businesses need to provide “personalized retail” experiences that are tailored to each visitor. Regardless of what they’re shopping for, today’s consumers expect businesses to know their interests and preferences. Businesses have the ability to gather this information through predictive analytics, which involves the study of current and historical consumer data that businesses use to launch personalized marketing campaigns. Through predictive analytics, business owners can learn the demographics and interests of the people who shop for their product.
In the future, artificial intelligence may play a bigger role in gathering this predictive information, even for small, community businesses. In an article titled “Future Trends From NRF: A Brick & Mortar Disruption,” marketing expert Tamara McCleary talks about the possibilities of IBM’s artificially intelligent Watson and how its “cognitive computing abilities allow it to look at vast amounts of data, much of which is unstructured…allowing for companies to understand their customers in profound new ways.” For instance, businesses in the future may have Watson scour social media sites to quickly understand how customers feel about their product.
And while the integration of A.I. like Watson might be a few years off, small businesses already have access to some fairly advanced technology.
“Formerly enterprise-only solutions like touch-controlled office kiosks, interactive point-of-sale terminals and even sophisticated employee inventory systems are now within reach of the smallest small businesses,” writes Jonathan Blum in a story for entrepreneur.com.
Looking further ahead, robots might one day replace humans in some office and administrative roles, with the ability to do everything from ordering stock to managing employees’ schedules and payroll. But most experts are confident there will still be plenty of jobs for humans in the future, and in a recent interview with wired.com President Obama showed optimism regarding the development of robotics and A.I.
“Historically, we’ve absorbed new technologies, and people find that new jobs are created, they migrate, and our standards of living generally go up,” Obama said.
Technology will also play an important role in the experience of shopping at brick-and-mortar stores in the future. Engadget writer Chris Burch points to the ways in which many brands have already incorporated technology into the brick-and-mortar shopping experience. Some stores use beacons, for example, to send coupons or product recommendations to consumers’ phones when they enter a store. Other technology like radio frequency identification (RFID) allows businesses to track their retail inventory digitally. Even more futuristically, some brick-and-mortar stores have embraced augmented and virtual reality to enhance their customers’ experience. Burch predicts that storefronts of the future will use augmented reality to demonstrate to customers the various ways products can be arranged and used: “Someday, you can expect to see virtual fitting rooms, interactive window displays and augmented reality-assisted navigation through larger stores,” Burch writes.
It’s interesting to think about the ways business owners and consumers will benefit from technology that streamlines the process of buying goods and services. But, even 50 years in the future, some aspects of running a business will remain the same.
“The majority of people want to do business eyeball to eyeball,” Walsh says. “The internet, social media—these are ways people get introduced to a company before they meet them personally.”
“On the retail side of things, there’s more competition in Westmont than ever before,” adds Forssberg.
Forssberg speaks confidently about the future of local businesses. He notes the wide range of business sizes and types in Westmont, from the restaurants in Westmont’s downtown social center to the new South Westmont business district that may soon replicate the success of the Ogden Ave. corridor.
“People still want a high level of service, and that’s what you find in brick-and-mortar stores,” Forssberg says. “I don’t think the internet will stop people from shopping locally. It may expedite the selection process, but ultimately people will end up at the brick-and-mortar store.”