How retail industry can thrive amid change
Merchants must embrace technology, draw on university research, Isabelle Bajeux-Besnainou says.
Over the last three decades, few industries have undergone as profound a change as retailing. According to the Total Retail Survey 2016 (PwC), 54 per cent of shoppers in the 25 countries surveyed buy goods online on a weekly or monthly basis, with 34 per cent using their mobile phone to do so.
On a local level, the ebbs and flows of Montreal’s retail landscape are also telling. Danier, Future Shop and Jacob are a few examples of notable store closures. Meanwhile, success stories like Frank + Oak have rethought the brick and mortar concept to become an immersive experience that meets the expectations of modern consumers. Today’s shoppers demand more than ever before, from competitive pricing, to greater product information and choice across every channel.
The rise of e-commerce is merely one factor forcing retailers to reconsider their business structure to cater to an increasingly digitally savvy society. Other technological advances, globalization, as well as altered demographics and consumer behaviour, are redefining the world of retail. These changes will continue to affect where goods and services are sold, what is sold and how it is purchased.
At the crossroads of change comes opportunity. Retailing is now a science and the timing is right for McGill University and the city of Montreal to emerge as key players, poised to make an impact on this vital economic sector.
In order to be ahead of the curve, retailers must embrace technology. They also need to draw from the research emanating from universities, and from across disciplines. McGill University has much to contribute to this effort, particularly following a generous $25-million gift from the Bensadoun Family Foundation, which will establish a new school of retail management and will pave the way for further catalyzing research.
For example, McGill’s expertise in neuroscience and big data analytics can be steered toward examining purchase behaviour patterns. Such insight can be applied to develop software that guides individuals toward healthier choices in supermarkets, while ensuring that such an endeavour is economically sustainable for the retailer.
Developments in artificial intelligence are also reshaping the retail landscape. For instance, AI is contributing to more effective pricing techniques by firms and more reliable search and product recommendation systems for consumers. The rise of AI will also have an impact on the workplace by automating certain tasks currently handled by employees. Researchers at McGill’s Faculty of Management are well equipped to determine how AI-based technologies will affect employment in retail and can provide answers about how to support the massive retraining that will be needed among the workforce.
The research conducted under the Trottier Institute for Sustainability in Engineering and Design, as well as at its School of Environment, also comes to mind. As consumers continue to gravitate toward online shopping, retailers have implemented many measures of convenience, such as flexible return policies and quick, affordable shipping (e.g., Amazon Prime). As a result, consumers tend to make unnecessarily frequent transactions of smaller quantities. The effect of this behaviour on greenhouse gas emissions could be important and opens the door for environmental researchers to further assess this issue.
Finally, if McGill offers a promising hub of expertise, then Montreal is the ideal context in which to train the future leaders of an increasingly dynamic industry. After all, the city is internationally recognized for its ventures in the retail sector, both past and present, while its renown in related fields, such as artificial intelligence and neuroscience, make collaboration between industry and McGill’s thought leaders a natural fit.
Overall, there is a wealth of expertise in retailing at McGill to draw from, a vibrant history in Montreal to build upon, and definitely a very bright future to shape.