Disruption is the Mother of Invention … Again

America has too many stores, too much inventory and too few shoppers. Macy’s, J.C. Penney, Sears, J.Crew and other retailers have announced that they will be closing stores because they can’t justify the return on these expensive fixed assets — and because consumers no longer choose to spend their money there.

The internet’s influence on consumer spending is exceeding all expectations, and the rate of that influence is increasing. However, this disruption isn’t all digital. Most commerce occurs, and will continue to occur, in stores. Fifty percent of consumers shop in-store with a smartphone in their hand. Mobile is now an extension of the in-store shopping experience. Furthermore, today’s products are physical, digital, virtual and even borrowed.

The Rise of Experiential Retail

Disruption in retail isn’t new. In fact, it has been the catalyst for growth and success since the industry’s inception.

In 1900, when my great grandmother came to America, she shopped at her local general store, and she spoke with the proprietor, who knew her needs well. Sears disrupted this standard with its 1909 Christmas catalog, a 1,200-page behemoth that brought shopping into homes and presented us with thousands of products we never knew were available.

As industrialization continued, the U.S. population began to migrate from rural areas to cities, and each metropolitan center had its own unique “department store.” World War I, the roaring 20s, the Great Depression, Prohibition and World War II altered the retail landscape as economic, political and consumer disruptions redefined products, services and experiences.

Mid-century brought the Interstate Freeway Act and millions of automobiles, combined with post-World War II prosperity. Suburbs emerged, and malls and regional department stores followed. Shopping became a nexus of social activity.

By the 1970s and 80s, the landscape had changed so much that department stores had to go national, go different or go away. Macy’s consolidated and Dayton Hudson morphed into Target Stores.

The 1980s and 90s brought the advent of personal computing, followed by the creation of the “world wide web.” In 1997, Amazon.com brought shopping back into our homes, offering millions of products we never knew were available. Ten years later the iPhone moved shopping to our very hands — anytime, anywhere.

Today, my home does much of the shopping for our family. Dash and other “Internet of Things” devices “sense” our usage and place “just in time” orders on our behalf. And Amazon’s Alexa listens to everything we say in our home, answers our questions, plays music and adds items to our shopping cart. Once again, we’re speaking with the proprietor who knows our family’s needs well.

Innovation is Essential to Retail’s Future

Disruption isn’t only inevitable, it’s essential. It removes overgrown obstacles and makes room for new growth. New growth is already visible in today’s landscape. From successful former digital pure-plays opening physical stores, including Warby Parker and Bonobos, to Nike and Adidas’ new physical “super” stores in Manhattan which boast an immersive experience in a way other stores cannot match, retail flourishes in new ways.

This landscape overwhelmingly includes smart devices to inform purchase decisions in new ways. Some interesting new service models are evolving. Deliv, for example, supplies same-day delivery service for retailers and merchants, while Curbside.com provides drive-thru pickup and returns for any store within a mall. Increasingly, mobile devices are our “go to” source for product, brand and retailer experiences.

Keeping In-Store Relevant

Tomorrow’s brick-and-click retail winners will leverage physical stores as their most powerful asset. When stores are relevant, they connect shoppers, products, brands and staff in a very real and intimate fashion — one that’s increasingly important in a world where people have more digital connections and fewer “real life” interactions. Interacting with real people in real stores can be an antidote to the epidemic of American loneliness.

As in the past, tomorrow’s retailers must offer great product, extraordinary value, remarkable and personalized experiences, frictionless 24-hour shopping, immediate availability, and outstanding service. Survival requires one or more of these attributes; industry leaders will deliver them all.

David J. Katz is executive vice president and chief marketing officer at Randa, a global consumer products business and the world's largest men's accessories company. .