Traditional retail remains in a period of widespread transformation, as venerable brands such as J.C. Penney and The Gap fight to stay relevant and household names such as Sears and Toys R Us cease to exist in their traditional forms. Many suburban malls have shuttered, or limp along with few tenants. The rapid transformation even has its own doom-and-gloom shorthand: the Retail Apocalypse. Amid the turmoil, there is also transformation and growth. Industry titans such as Amazon and Walmart continue to expand and offer ever-more services to consumers, and many internet-only retailers have expanded their channels into the supposedly moribund brick-and-mortar arena. 

Darden Professor Vidya Mani, whose research focuses on the supply chain and the impact of operational decisions under changing marketplace conditions, says these are indeed dynamic times but cautions that the history of retail is rife with transformation and reinvention. She recently spoke about how she sees the space — and what may come next. 

One term we hear often is “retail apocalypse,” and the notion tends to be that brick-and-mortar stores are going away. How do you view the landscape?

The way we think of retail is changing. If we hold on to our original concept of retail being anchor stores — the Macy's, the Sears and places like that — those are certainly disappearing. But we've seen that trend for a while. Retail on its own — basically, trying to deliver things to customers, to deliver value — that actually remains an extremely vibrant proposition. It's about new businesses coming in, new modes of delivery coming in, customer co-creation — finding some way to make what is unique for a customer impact what the customer is buying and wearing.

What you do, what you wear, what you aspire to, they're all connected in some way, and retailers are increasingly tapping in to that connection. Some buildings or brands may be crumbling and going away, but not retail.

Can the decline of what we might call traditional retail — the physical spaces — be summed up by the rise of the internet?

The internet is certainly a big part of the story. The internet has a way of making the world accessible — I can connect to anyone at any point in time. It also means that anyone at any point in time can also be my competitor, and that's exactly where the challenge and the opportunity is. You cannot just have the demand and not have the supply.

You want the demand, you want to reach out to the furthest corners of the world so they can understand your products and services, but you can’t do it without having those same people come up and compete with you. That tension, that's what makes for an extremely new business model and extremely innovative way of trying to work.

There's a whole generation that cannot think of being without the internet, does not know what life was without the internet. For them, it's as simple as having electricity and water. If you look at Gen Z or millennials or whoever is coming up next, they are the ones who are demanding innovation from traditional business models.

You’re an operations professor. What strikes you, from an operations perspective, about what is happening?

What consumers want and need is one experience to order and receive the product they want, and they generally do not care how you manage your backend. Of course, the company may work through many different modes of processing orders and delivery methods.  

Customer expectations have shaken up a lot of industries. They were not prepared for it, and they were not prepared for how demanding a consumer would be, how intolerant they would be of low quality and inefficiency.

For a very long period of time, we used to think low cost means low quality, and that's not true. That shift, that's something that I think is fascinating.

How we teach retail is changing. How we look at what a global supply chain looks like and whether it is going to be responsive enough, those are the things I think really make this a very interesting time. It requires us to think differently about how we teach in the space.

Do you have a sense of how important a physical presence will be to the future of a consumer retail business?

Brick and mortar as a way to meet customer's needs makes sense in a lot of places.

For example, there will be times when customers want to experience the clothing and the related items that go with it, and they want to do that at the store. The fallacy lies in thinking that's the only place they will transact. You can’t have the brick and mortar and not have a backend that also supports a ship-to-store or ship-to-customer or order online and return to store — all of these combinations. Only when all of those combinations exist does the customer feel confident in choosing how to purchase.

There are going to be times when the retailer has to make a conscious choice to say we cannot offer all options – furniture, for instance. Trying to deliver furniture with next-day delivery to every zip code is something few businesses can promise. That's where brick-and-mortar stores can really step in and remain relevant.

What trends do you see on the horizon? How might things look different in 10 years?

It’s important to remember that changes in retail are not new. Think about a company like K-Mart entering bankruptcy and coming out of it. Or the changes you’ve seen over the years at Forever 21 or Macy’s. Going out of business and then coming back in is not new for retail. 

Your core product offering and value may not change, but how you let the customer experience it will change. I could imagine, perhaps 10 years down the line, having what I’ll call an interface, because the technology probably doesn’t exist yet, that allows me to actually feel what a piece of clothing with the right accessories would look like on me and how it would look in a setting. But also, what is the carbon footprint for this product? Who was the farmer who grew the raw materials involved? What were the different markets involved in the production? Who is getting the money along the way? Am I supporting the planting of a tree to account for the resources used?

In the last decade, we have seen movement toward asking firms to be accountable for their actions and transparent in the way they do their business. In the coming years, you may see consumers holding them accountable for their supply chain. For example, Gap and Macy’s and the like will need to know where their cotton and nylons come from, how they are made and, most importantly, perform the due diligence needed to assure us that everything is done the right way and is sustainable. This will mean a push for supply chain transparency in a way we have never seen before.

In the future, I probably will get that full, traceable portrait.

You may also see new ways to extend the lifecycle of a product. That fast-fashion sweater you’re wearing, you might wear your product for two months, but it may not necessarily stop its lifecycle at that point. You might find repeated lifecycle uses with different people in the same way that you think of electronics — so that it can also be sustainable. That could help solve the tussle between fast fashion and sustainability.

Hopefully, technology and social consciousness will help us get there.

About the Expert

Vidya Mani

Associate Professor of Business Administration

Mani is an authority in retail operations, supply chain risk management and sustainable operations, and illicit flows and counterfeit goods. Her research investigates and establishes the impact of operational decisions on performance under changing marketplace conditions. She studies how firms can make these decisions in a responsible and sustainable manner, specifically in the retail, electronics, oil and gas, and pharmaceutical sectors. 

Mani is currently a Franklin Fellow at the Bureau of Democracy, Human Rights and Labor’s Office of International Labor Affairs, which leads the Department of State’s efforts to advance labor rights in U.S. foreign policy. She has also worked with the U.S. Department of Defense to mitigate counterfeit risk in the weapons system supply chain.

Prior to joining the Darden faculty, Mani taught at Penn State’s Smeal College of Business and earned her Ph.D. at the University of North Carolina at Chapel Hill. 

B.E., MS University; MBA, Indian Institute of Technology; Ph.D., University of North Carolina at Chapel Hill Kenan-Flagler Business School