Opinion: Expect the unexpected in the ever-changing world of retail

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Surprises such as Sainsbury’s interest in Argos and Morrisons’ tie-up with Amazon signal more momentous change to come

One of the greatest things about working in this sector – be that as a retailer, supplier, service provider, analyst or journalist – is that the retail industry has proven time and time again that it has an amazing ability to surprise.

Just when you think that you’ve got everything figured out, a retailer will do something immensely leftfield that will leave you scratching your head wondering why you hadn’t anticipated it.

“Just when you think that you’ve got everything figured out, a retailer will do something that will leave you wondering why you hadn’t anticipated it”

Bryan Roberts

One of my favourite days at work involved watching a senior colleague’s face and admiring his command of expletives as he read a press release from Bentonville.

Having comprehensively rewritten a grocery sector report to account for the recently unveiled merger of Asda with Kingfisher, it was ready to go to the printers.

Walmart, however, came in at the last minute with a superior offer, destroying weeks of our hard work and giving me my first harsh lesson that one should always expect the unexpected in this business.

Change on the cards

This year has been an absolute corker in terms of being smacked around the chops by curveballs, and we’re only two months in.

Whether one considers the Sainsbury’s bid for Argos (and the subsequent South African intervention), the imminent arrival of Bunnings or the Morrisons deal with Amazon, 2016 has already been full of surprises.

Sainsbury’s has a good track record here – the exhumation of Netto and market entry into Egypt being strong examples – and Amazon is likely to be an ongoing source of dumbfounding bombshells as it continues its inexorable march to world domination.

“Retail is fortunate enough to be home to a great number of visionary thinkers and innovative entrepreneurs”

Bryan Roberts

The fact that this industry is perpetually unleashing ‘I didn’t see that coming’ moments is representative of a number of factors, I believe.

One is that retail is fortunate enough to be home to a great number of visionary thinkers and innovative entrepreneurs who often have greater levels of wisdom and foresight than us mere mortals.

Another is that retail has a ceaselessly demanding customer base that consistently elevates its expectations of what good retailing and customer service looks like.

A third factor is that retail is a genuine manifestation of economic globalisation: there are few other sectors – fast food stands out as one – that have become as genuinely globalised as retail.

More to come

Clearly, there have been countess reversals and some colossal disasters along the way, but the fact that cross-border expansion continues to dominate the headlines underlines the fact that market entries and exits will continue to fascinate.

Perhaps the main factor is that retail has become immensely challenging.

The observations that growth and profitability are no longer a given – if indeed they ever were – and that technological change wreaks havoc and redefines the possible mean that the surprises are far from over.