The 2013 holiday season has been a good one for consumers, but not such a good one for retailers, according to MIT marketing professor Sharmila Chatterjee.
"Retailing has become a multichannel free-for-all. To the brick-and-mortar giants, online retailers are no longer pesky niche players but life-threatening rivals," she wrote in Businesweek (Dec. 23).
But it's not just the threat of e-commerce, she adds. There's m-commerce too. Snowstorms were a major issue across the U.S. this year as well.
If retailers could create unique shopping experiences, they wouldn't be so indistinguishable.
Chatterjee says the recession period still looms over many and don't forget about showrooming: "With one click, they can find out how good a deal really is."
She says retailers have trained customers to wait for deep discounts, "and to get business, retailers have to discount even more."
Lastly, if you do the calendar math, 2013 had the shortest holiday season in a decade: "six fewer days between Thanksgiving and Christmas than there were in 2012."
So with all of these factors stacked against them, what are brick and mortar retailers left to do?
Chatterjee's advice sounds more like a scolding than a consolation: "If retailers could learn to create unique shopping experiences instead of simply extending deep discounts, the system could work to everyone's advantage. But in today's hypercompetitive environment, with each retail player pursuing narrow self-interest, they all lose."
Retailers must evolve and differentiate themselves based on customer service and the in-store experience.
"Unable to distinguish between the big names in retail, up to 86% of consumers say they are turning to their small, local mom-and-pop businesses for last-minute purchases."
And so, retailers must evolve. They must offer unique shopping experiences rather than defaulting to discounts. They must differentiate themselves based on customer service, efficiency, technology and the in-store experience. If they don't, the factors Chatterjee identified above will continue to stack up against them.