2020 has been a very tough year for most retailers and, with the prospect of COVID-19 vaccines launching soon, it is understandable that many believe retail will return to normal next year. But the president of Shopify disagrees and believes the direct-to-consumer revolution is the future of retailing.
Speaking to Retail Week from his hometown of Ottawa in Canada, Harley Finkelstein warns that the D2C trend is not “just a fad” and that physical retailers unable or unwilling to offer a strong own-brand proposition, or shopping experiences that consumers are happy to pay extra for, will disappear eventually.
“What we’re seeing is a tale of two retail worlds. On one side, you have these resistant retailers who are looking to go back to the status quo. They are just waiting for this pandemic to be over so that they can go back to doing things the way they always did, but that’s not going to be the case,” he said.
“On the other side, you have these resilient retailers who are future-proofing their business – and a lot of them are using Shopify to do that. That is happening because the previous incumbents, which were very large, more traditional retailers, are not adapting fast enough.”
Finkelstein, who has been president of the Canadian e-commerce platform for the past ten years of its 14-year existence, predicted that these ‘resilient retailers’ (he identifies Gymshark, Graze and Allbirds, among others) will benefit the most from this year’s crucial festive shopping season – not least because of the changes to consumer behaviour brought on by the pandemic.
“I think the holiday season will be a blueprint for the future of retail. In this new reality, independent businesses and brands and the entrepreneurs behind them will lead the retail industry,” he said.
“Consumers are voting with their wallets to support independent brands. We are all looking around at our towns and communities and saying: ‘After the pandemic ends, if our town is going to be interesting, it has to have small businesses there’,” he continued.
“I think consumers will say: ‘Wherever possible, we don’t want to buy from a department store, we want to buy from an independent brand and we want to buy direct’.”
Shopify certainly has been busy during the coronavirus crisis. It has secured partnerships with Walmart and video-sharing app TikTok, and its gross merchandise volume has soared 119% to $30bn over the second quarter.
Reflecting on the momentous changes to the industry seen this year, Finkelstein said: “It feels like the retail world that would have existed in 2030 has been pulled into 2020. Covid has permanently accelerated online commerce and I think it has changed the retail landscape forever.”
Sourced from Retail Week