The Future of Retail Stores: An Analysis of Technology's Impact

This essay delves into the evolving landscape of retail stores, focusing on the impact of technology and the strategies employed by retailers. It begins with an introduction highlighting the shift from traditional brick-and-mortar stores to online platforms, driven by societal changes and technological advancements. The analysis examines the case of Aldi, a retailer that prioritizes physical stores, and explores how technology is used to enhance customer experience rather than replace physical presence. The essay references scholarly articles to support the argument that technology should complement, not supplant, physical stores. It emphasizes the importance of considering customer preferences, including the social aspects of shopping and the needs of those less familiar with technology. The essay recommends that retailers use technology to complement their physical stores. The conclusion emphasizes that technology and physical retail will work in a complementary manner. Aldi's success is highlighted as an example of how a retailer can thrive while prioritizing its physical presence and compensating for online inefficiencies through quality products and reduced costs.

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THE FUTURE OF RETAIL STORES
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THE FUTURE OF RETAIL STORES
Introduction
Technology has significantly changed the business world. Currently, the mass migration from
the traditional brick and mortar to online business strategy has been observed in several
industries. This migration aims to meet the changes that are ongoing in the society. However,
some businesses have been reluctant to incorporate this wave of technology into their
activities. With the proponents of technology claiming that brick and mortar method face
extinction in the future, scholars have illustrated interests in unveiling how technology affects
the future of retail stores. The retail industry is one of the most competitive sectors in the
modern business world. The heated rivalry between Aldi and Woolworths in Australia is an
ideal example of the competitive nature of the retail industry. Technology adoption in the
retail industry has been widespread in spite its effects being uncertain. Despite the spread of
technology in the retail market, physical stores will not be extinct in the future as there is
more to shopping than convenience and quick delivery.
Analysis
Aldi is among the few retail stores that believe that technology cannot replace the physical
stores. The store uses technology for marketing and utilizes its physical stores to enhance
customers’ experience. In Australia, Aldi is one of the retailers that insist on physical
presence. With the grocery retailer insisting on providing quality products at a low price to its
customers, it has silenced the proponents of technology who claim that brick and mortar
influence is dwindling. In its official website, Aldi states that is has over 10,000 stores
globally, and over 470 throughout Australia (Aldi, 2017).
Despite its physical presence, Aldi ranks among the top ten grocery retailers in Australia
further silencing the brick and mortar critics. Interestingly, critics of Aldi’s business strategy

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claims that the store’s lower pricing methodology has enhanced its competitive advantage in
the wake of technology inception in the retail market. However, it is essential to note that
business is about strategizing (Min, 2010). In business, one only accepts changes that will
add value to your customers, business idea and mission. For Aldi, technology has proved
insignificant to its progress in the present.
Aldi’s perception towards technology adoption is supported by the deliberation of Grewal et
al. (2017) in their article on the future of retailing. According to Grewal et al. (2017),
technology should be used to enhance customer engagement not to replace the physical
presence of enterprises. Technology is vital for collecting customers’ perceptions about a
brand’s services and products (Shankar et al., 2016). Furthermore, it is important in the
marketing of a brand’s products. In this respect, Grewal et al. (2017), predict that technology
will not wipe out the physical presence of retail stores. However, they warn that retailers
cannot assume the growing influence of technology on the customer’s purchasing decisions.
Consequently, it essential for retail stores to select the elements of technology that they
consider vital to their sustainability and attainment of their strategic goals.
Customers are the most important factor in the retail market. However, this does imply that
retail decisions are solely focused on customers. Kumar et al. (2017) argue that retailers
should develop and implement business strategies at four levels. These four levels focus on
the market, firm, store, and customers. Currently, the widespread inception of technology is
based on the customers alone. In fact, Kumar et al. (2017) point out that there is insufficient
data on the customers’ preference for online stores over the physical ones. As Kumar et al.
(2017) advice, it is essential to address the needs of all customers in the retail world.
Precisely, not all customers support the concept of online shopping. Some customers value
the social aspect of physical shopping with families and friends. Moreover, not all customers

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are conversant with technology. Consequently, replacing physical stores with the online
platforms will inconvenience some customers.
The profitability and sustainability of retail stores depend on how they address the different
needs of customers. According to Grewal, et al. (2017), quick and convenient shopping is just
one of the multiple needs of the customers. However, quick and convenient shopping is not
among the basic needs of customers. As Kumar et al. (2017) expound, important factors such
as price, quality of products, and customer care suppress the influence of technology in
customer decisions. Aldi has compensated it technology inadequacies with quality products
and cheap pricing. Moreover, Aldi has been quick to stock grocery products based on the
changing customer needs. Currently, Aldi prioritizes selling health supporting products to
satisfy customers' demand for healthy eating. In this respect, retailers should strive to meet
the customer’s preferences inclusively not selectively.
Recommendations
Kumar et al. (2017) opine that retailers who optimize product assortment across different
channels perform better than those who focus on a single platform. In this respect, it is vital
for retail stores to exploit all the existing channels to maximize their profits. This view
implies that retailers should use technology to complement their physical stores. Although
Aldi has been successful without investing intensively in its online market, it a high time they
reconsider their stand. The management of Aldi needs to consider the interests of their clients
that prefer online purchasing. With demographic surveys indicating that the millennials will
dominate Australia's population in the future, it is essential for Aldi to meet this group’s
technology needs. Moreover, Aldi needs to enhance its online platform to increase its
competitive advantage. Aldi’s main competitors such as Woolworths and Coles have already

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diversified their activities to embrace online retailing. To maintain its competitive advantage,
Aldi should promote its online retailing activities the same way it supports its physical stores.
Conclusion
Conclusively, technology will not wipe out physical retail stores in the future. Instead, these
two platforms will work in a complementary manner. Currently, Aldi’s success is an ideal
illustration that there is more to retailing activities than technology inception. Although the
firm uses technology for its marketing and customer support services, it prioritizes its
physical presence. Moreover, Aldi compensates its online inefficiency by offering its clients
quality products at a reduced cost. However, with research indicating that technology is an
influential factor in customer’s purchase decision, Aldi’s management needs to support its
online retailing activities to meet the needs of their digital customers.

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Reference List
Aldi, 2017. About Aldi. [Online]
Available at: https://corporate.aldi.com.au/en/about-aldi/
[Accessed 28 September 2017].
Grewal, D., Roggeveen, A. L. & Nordfält, J., 2017. The Future of Retailing. Journal of
Retailing, 93(1), pp. 1-6.
Kumar, V., Anand, A. & Song, H., 2017. Future of Retailer Profitability: An Organizing
Framework. Journal of Retailing, 93(1), pp. 96-119.
Min, H., 2010. Evaluating the comparative service quality of supermarkets using the analytic
hierarchy process. The Journal of Services Marketing, 24(4), pp. 283-293.
Shankar, V. et al., 2016. Mobile Shopper Marketing: Key Issues, Current Insights, and Future
Research Avenues. Journal of Interactive Marketing, Volume 34, pp. 37-48.