Which retailers could survive digital disruption?

Founder and Chief Investment Officer of Montgomery Investment Management
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To better understand retailing’s future, it is important to examine its development to date and to look at countries where its future is already being embraced, such as South Korea and China.

The rate of growth of online retail is well above that of off-line retailing and the result is a loss of market share for those brick-and-mortar retailers not online. The end result is a loss of revenue and profit that has caused many retailers to collapse in 2017.

Of course, the growth is not being entirely driven by retailers themselves. One example of the changes being faced by retailers is the ability of mobile technology to remove borders for consumers. Another is the growth of large online retailers, which has improved the economics for logistics companies and this has translated into efficiencies for small retailers, enabling them to compete more effectively and proliferate. Improvements in living standards, a burgeoning number of brands and rapid changes and uptake in technology have driven changes in consumer preferences. The convenience of online shopping has also allowed, or seen consumers dedicate more time to, entertainment, travel, eating out and even working.

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