In an age where every retail conversation ends in a mashed-up blend of both the physical and virtual worlds, it’s vitally important to understand what retailers are doing – specifically – online. And while 2017 has seen a great deal of press around the outright death of the store as we know it, (headlines no doubt written more to garner attention than they are based in truth), the sheer fact remains that traditional retailers treat stores and digital channels very differently. In most cases, internal organizational setups all but guarantee this separation will continue for years to come, and therefore we need to check in on retailers annually to understand exactly how they see their own future: are stores the only way to compete with Amazon? Or does online still hold promise?

As you can see from Figure 1 from a report we won’t even be releasing for another month, with each passing year, that answer becomes more and more clear: they’re both vital, but when push comes to shove, future strategies will lean on digital channels more heavily.

Figure 1: The Future?

Source: RSR Research, August 2017

At first pass this could be explained away by one thing: it is vastly easier to affect wholesale redesign across digital channels than it is in the digital world. Changing stores is expensive, after all. And if you don’t like what you’ve done, it’s not an easy thing to just change up again.

But digging into the data a little further reveals that it’s not just about the cost and difficulty associated with changing stores, but the fact that retailers don’t believe they’ll ever be as profitable as digital channels (Figure 2).

Figure 2: The Future Explained

Source: RSR Research, August 2017

A Word Of Caution

With so much nonsense talk about “the death of store-based retailing “, it’s frankly become quite easy to point a finger at digital sales channels and say simply say “That’s the way forward for us. ” But as this report will expose, underperformers are far too quick to do that very thing. Online sales will not be a magic bullet for a retailer if the very fundamentals of retailing are not solid… and stores, if nothing else, quickly expose cracks in those foundational elements. So when we release this data next month with an eye on the future of digital channels, keep in mind: no matter how slick the digital offering a brand can put forward, if the fundamental mistakes that have caused that retailer’s stores to flounder are not a) identified and b) dealt with aggressively – that retailer’s digital channels will suffer the exact same fate, watching others pass them by.

We’ll let you know as soon as the full report is available.