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I guess it’s funny that what got me thinking about winners and losers in the digital revolution was a couple of stories in an old-fashioned, dead-tree version of a newspaper. The stories in The Wall Street Journal, one over the other, told the tale of the decline of the newspaper industry and the trend of fewer shoppers visiting physical stores. Yes, the Internet changes everything, as we’ve been saying for years. The juxtaposition of the stories grabbed my attention because they were about newspapers, an industry I recently left, and retail, an industry I now pay a lot of attention to. It would be tempting to draw simple parallels: The Internet killed newspapers and now it’s killing brick-and-mortar stores. WSJPhoto But while both sectors are facing massive market shifts brought on by technological progress, their prospects couldn’t be more different. The main reason? Newspapers sell advertising and stores sell stuff. “Advertising is no longer a good, like a toaster, but a way of targeting specific buyers at specific times and places on specific devices,” media analyst Ken Doctor said in an e-mail when I asked him to compare and contrast the industries. “The targeting of advertising -- made possible by the Web -- is a whole different product/service than space buying (print or online).” Newspapers’ revenue from print advertising is now less than half of what it was in 2006, according to the Pew Research Center. (While the chart with this story is a year old, Pew is reporting that print ad revenue was down nearly 9 percent in 2013.) Add to that the fact that digital ads raise dimes on the dollar compared to print advertising, and you can see the bind print newspapers are in. (You’ve heard the joke about the manufacturer who was losing $1 on every widget shipped, right? He figured he’d make it up on volume.)

But a toaster, sold by say Crate & Barrel or Macy’s or Target, is still a toaster, whether it’s sold online or in a store. And whether you buy it at the store or online, the toaster, in general, holds its value and the store that sells it to you can still profit from its sale. Which is not to say that retail stores have nothing to worry about. The Journal reports that a monthly survey of traffic to U.S. stores showed that with the exception of April, shopper visits have dropped by more than 5 percent every month compared to the previous year for the past two years, according to ShopperTrak. “The pressure comes as consumer tastes are changing,” the Journal story says. “Instead of wandering through stores and making impulse purchases, shoppers use their mobile phones and computers to research prices and cherry-pick promotions, sticking to shopping lists rather than splurging on unneeded items.” In fact, retail needs to learn from newspapers and not be bashful about changing rapidly and dramatically to take advantage of consumers’ new ways of doing business. “Retail will evolve faster in the next five years than in the past 50,” Kathy Grannis, a spokeswoman for the National Retail Federation tells me. “Retailers have no choice but to keep up with the demand from their shoppers really.” Newspapers initially saw their online operations as competitors to their own print products. They’d delay posting breaking stories on their websites until they could deliver them in print to their subscribers’ doorsteps. Successful retailers, on the other hand, are rapidly melding their online and in-store operations into one experience. “The ones that are unable to adapt to the new world, to combine offline and online and give into the fact that (retail stores) are showrooms, they will die,” says Tuomas Wuoti, CEO of Walkbase, a Finland-based company that helps physical stores put consumer data to use. “But the ones that are actually looking forward to the future and embracing opportunities -- the online opportunities alongside their offline brick-and-mortar -- they’re making a big buck out of it.” For example, Wuoti says from his home in Helsinki, smart retailers are offering “click-and-collect,” the ability to purchase online and pick up in store. Or they are giving shoppers the option of ordering in-store and having their purchases delivered to their homes. The best in the business are connecting with mobile shoppers who opt-in to programs that sense when individuals are in a particular store. Based on past behavior those merchants then send coupons and other offers on the spot. Nordstrom Grannis, whose organization represents 12,000 members, points to retailers like Nordstrom, which is integrating its in-store shopping with social activities through Wanelo (displayed on TV screens) and Pinterest (through displays and arming associates with an app that matches popular Pinterest items with inventory). “What a lot of stores, believe it or not, are doing, they’re actually bringing the same online shoppers into their store and helping them have an online experience in their store,” she says. Retailers might have seen their e-commerce and in-store divisions as distinct and perhaps even in competition for a time, but they were quickly disabused of the notion, Wuoti says. “When you have separate teams, driving in different directions, different strategies,” he says, “it might be that you cannibalize your own business -- offline and online. You can actually try to harmonize it. Make it one business.” Just as online retailers have been striving for years to harness data to provide one-to-one personalization on the Web, in-store operations are now working to do the same. The effort was a big focus of the National Retail Federation’s recent NRFtech event, the organization reported on its website. Among the more notable innovations, according to the organization, were:

  • Artificial intelligence systems that go beyond analyzing consumers’ past behavior and anticipate shoppers’ intent.

  • “Supercharged” loyalty programs that collect consumer data from many different outlets and stores to create more meaningful offers.

  • Computer-driven imaging and data visualization, which for instance, can create heat maps (without identifying shoppers) that show traffic patterns and the time consumers spend in certain areas of a store.

  • Beacons and other devices that can locate shoppers in a store and send them relevant offers.

All of which, the NRF reports, were discussed in the context of choice and respecting consumers’ desire for privacy, which obviously varies by individual. “What really counts, is the personalized service,” Wuoti says of brick-and-mortar stores that want to stay competitive. That and an unwavering willingness to change. “The store isn’t dead,” says the NRF’s Grannis, “but it will continue to evolve.” The faster, the better. Photo of Wall Street Journal by Mike Cassidy, photo of Nordstrom by Mike Kalasnik and printing press by Jason Blair published under Creative Commons license. Mike Cassidy is BloomReach's storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.