By Jim Tompkins
CEO, Tompkins International
Would you be surprised if I told you there are still many who are in denial about the reality of retail transformation? There are business leaders with their heads buried in the sand, refusing to accept and understand that retail and shopping are forever changed. What is most interesting is that many North Americans are those that are in denial. The U.S., Canada, and Mexico are all very different, but they all have their "retail heads" equally buried in the sand:
- United States: A recent Businessweek article argued that Singles Day will not catch hold in the U.S. because 1) November 11 is already Veterans Day, 2) There is not room between back-to-school sales and holiday sales for even more sales, and 3) We already have enough U.S. holidays. But I disagree with all three of these arguments. I am a proud U.S. Army veteran, but that does not occupy my entire November 11. Also, most Black Friday Sales, Thanksgiving Sales —and yes, even Cyber Monday Sales —begin in early November. I think November 11 would be a smart U.S. sales date because it is roughly 90 days after back-to-school sales and 45 days from December 25. In addition, the Alibaba Group 11.11 Shopping Festival is not considered a holiday or an official day off work.
- Canada: Last week I wrote a blog post about Alibaba in Canada and how the Canadian Prime Minister met with Alibaba's founder Jack Ma to discuss the possibility of selling Canadian agricultural products to China. This resulted in very little feedback, with some even focusing on why Canada would want to "have a relationship with a Communist country." (Sigh.)
- Mexico: In discussions with several business leaders in Mexico, I was told e-commerce in China is not and will not be relevant because most Mexicans do not have credit cards and logistics for e-commerce delivery in Mexico is difficult. But that would mean Alibaba could never have been successful in China because fewer Chinese people had credit cards in China than in Mexico, and the logistics for e-commerce delivery in China was impossible. Some leaders in Mexico are clearly overlooking an important opportunity.
Overall, the U.S. is in denial about the huge success of Alibaba and its implications on cross-border trade. To learn more about Alibaba, you need to see the The Alibaba Effect video. Next there is Canada, who is in denial about Chinese consumers and the unlimited potential for Canadian farmers to sell agricultural products to China. To learn more about China's consumers, read the new book China's Super Consumers. Finally, Mexico is in denial about the challenges Jack Ma faced when he began Alibaba in China. Jack has not only overcome these challenges, but he has created what will become the world's largest retail platform in 2015.
Alibaba's IPO this past September was the largest in the history of business and its goal is cross-border trade. China is the fastest growing economy in the world, and is in close competition with the U.S. to become the largest economy in the world. Plus, Alibaba took in $9.3 billion of retail sales on Singles Day this year.
E-commerce and omnichannel retail will change the world and the supply chains of the world. If your head has been in the sand, don't worry —you're not alone. Go ahead and pull your head out, comb the sand out of our hair, and embrace the largest business transformation of all time.
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