Warren Buffet sells WalMart stock. The media announces that retail is dead.
Commercial real estate has long been known as steady, blue-chip, even boring, with stable long-term, triple net, leases, that generated predictable income for real estate investors. Then along came Amazon.
Buffet’s take on Amazon, “It is a big, big force and it has already disrupted plenty of people and it will disrupt more,” adding that many companies “have not figured the way to either participate in it, or to counter it.”
A once stable industry has been rocked by change, and change isn’t going to go away, but retail isn’t going to go away either. Retailers will learn to participate in e-commerce, or counter it, and their strategies will almost certainly be a combination of brick & mortar assets with digital services delivery.
If change is the new constant, retailers will need to learn to manage change, and control costs more effectively. They will need to do it in close collaboration with their real estate and services supply chain partners.
Business practices and their supporting systems must change too. Traditional enterprise business processes and software will be replaced by real-time services delivery, operational monitoring and cost accounting processes. Collaboration will be the new norm, connecting guests to tenants, to landlords, to back of the house service providers, to their suppliers, so that services are delivered in real-time, with real-time control of service costs. Digital service and supply chain technologies, long a competitive advantage for Walmart and other leaders, will become the norm for the new retail.
Guests will enjoy a different experience with every visit, with digital access to services within this digital-physical environment. Retailers will live and die by real-time knowledge of their digital and physical retail environment. Landlords will provide the location, services, and data that will make this happen.
The new retail environment will all come together on a real-time asset and services management platform, integrating operational and information technologies into a single asset-based digital platform. See ours today at BuiltSpace.com.