Goldman Sachs: Stores Are Still Important

It is reported that although some people always like to talk about "the retail industry is about to die out", Goldman Sachs believes that the day will not come so early.

Goldman Sachs recently released a research report explaining why.

Some reasons that can and will continue to exist.

Goldman Sachs said that physical retailers must adapt themselves to the rapidly changing environment and adopt a more innovative approach and strategy to keep the threat of digitalization dominating the retail industry at all times.

Matthew Fassler, Goldman Sachs analyst, wrote in the investor report: "there are too many stores in the US retail industry," and Matthew

Out of step.

But the retail industry is not dead yet. It is changing.

How to use new technologies and new models may decide how they can survive in a ruthless pformation.

He added, "needless to say, Amazon's acquisition of the whole food supermarket" confirms that the largest e-commerce retailer in the United States has seen the future direction of the physical retail store.

He said: "the future retailers may be the retailers in the past, but the most efficient ones."

He said, don't forget the price behind this: there are about 15 million jobs in 2017 that are directly related to physical retail outlets.

This is why many people are committed to the physical retail business.

Major companies must continue to play the advantage of physical stores.

Today, although everyone is talking about the growing threat of e-commerce, 85% of retail sales still occur in physical stores.

Goldman Sachs said it is certain that more pactions will be conducted online, but big companies still have the opportunity to make use of their store assets.

"Despite the rapid growth of e-commerce and the relentless rise of e-commerce, it will maintain a 15% growth rate in the next 5 years, but in the next 5 years, 70% of retail sales will still take place in the physical store," she said.

Having said that, how retailers establish their so-called "future stores" will be the key.

The data will help managers better manage inventory, and marketing should lead to better store promotion, the cost of the entire store must be optimized, he said.

"Shops are still important."

Although more and more retail outlets are now bankrupting, the whole retail industry is shrouded in gloom, but the strongest and smartest companies will survive.

Goldman Sachs said more new technologies will appear in stores.

RFID helps to keep enough goods on the shelves.

Computer vision can observe the traffic of shoppers.

It helps to optimize execution at the store level, and also helps managers manage their businesses.

Retailers need to choose one goal.

Goldman Sachs said, "don't try to be the best in everything."

"In the existing enterprise group, the future successful retailers need to operate optimized logistics machines, or very convenient shopping options or optimized showrooms."

Fassler said that many retailers today are "stuck in the middle" trying to figure out what they want.

But the most successful retailers will decide what position to choose.

Retailers who sell goods need to pfer the supply chain to these super efficient models.

At the other extreme, stores with brand, experience and interaction can still fight for consumers' attention.

Contact with consumers is the key.

There are many discussions about robots instead of labor, but interpersonal interaction is still valuable, especially for physical retail experience.

Fassler said: "retailers in the future must strengthen their contacts with customers."

Electronic retailers are usually easier to understand customers faster because there is a lot of data on the Internet.

For example, Amazon can use its loyalty plan, cookie, Amazon cloud service and an application and other tools to track when users start shopping and what products they are looking for.

"By contrast, physical retailers rarely know which consumers are shopping in their stores, where consumers are shopping, or how far away from consumers to complete shopping pactions."

More attention is paid to inventory, shop design, and labor to make the real retailer better understand the customer, which will return in the long run.

Fassler said that after reviewing some of the latest 10-K documents, earnings call records and analysts' telephone conference records of some large retailers, Goldman Sachs found that few companies focused on building "future stores".

Nevertheless, WAL-MART, Messi stores and Krogh (Kroger) still stand out because they have openly discussed the role of data and technology in their business.

Goldman Sachs said that at the moment, "many other retailers are unwilling or unable to participate in this discussion."

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