Is retail really dead? This is the topic covered by the keynote presenter, Douglas Stephens, at the CGT Sales and Marketing Summit 2015. Stephens, author of The Retail Prophet, stated there is a 23 percent year-to-year increase in e-commerce growth.
However it is not all rosy. There is a challenge is with delivering purchases as quickly as possible. Loblaw is looking at Uber. Amazon is piloting drones and even looking at “predictive shipping” which is about using predictive analytics to prepare your shipment before you even purchase!
But Stephens mused that perhaps we are at the end of the beginning of e-commerce. He predicts that the next generation of e-commerce will be focused on delivering an augmented experience of shopping such as tactile apps that let you feel denim or how physical 3D printers will be 100X faster, enabling you to print almost anything you want—how you want it—from your home.
With the increased usage of devices, we are now entering the NOWcommerce phase. For instance, Amazon is creating dash buttons on your washing machines that lets the retailer know you need more detergent and then sends it to you. Google is leveraging context it gets from your searches. When you search for a blender, Google wants to alert you when you are near a product you searched for.
Although there are more than 6,000 stores that closed in the U.S. alone last year, Stephens believes the store isn’t dead yet. Shopping is a way to decompress and it is a social activity. There is often a visceral, emotional underpinning that comes from shopping that cannot be replicated online. Another indicator that shopping can’t be dead is the news that Amazon and Google are opening brick-and-mortar stores. What may be dead is the way we shop today.
The End of Boring Shopping
For the last 100 years or so, the store has been nothing more than product distribution. Brand manufacturers have traditionally worked through the retailers to make their products available. They relied on mass advertising to get the message to consumers.
Today’s brand message is blurred. Consumers have been sucked into a new dual screen phenomena where they watch TV and use their devices to surf or to interact via social media—this is especially true of a millennial. A person consumes 34 gigabytes of information a day—impacting if a message is received or even remembered.
Stephens professed that it is time to rethink the old purchase model. Fifty percent of sales will be influenced by mobile in 2016. It puts the consumer in control with their mobile devices. It may be time to consider the store as just another media. For instance, the store could be a showroom that will further influence downstream purchases. The store will be more about the production value of delighting the consumer. With technology and data, the experience can also include customization, personalization and even co-creation.
As an example, Kroger has changed the consumer experience by shortening the length of time in the checkout line to about 26 seconds. By tying social media to products, you could have hangers that tell you how many likes a product has while you are in the store. He also sees fewer people in the store and more technology with robots such as the way Loews is using OSHbots to help you find what you need and provide helpful videos to show you how to use it.
Don’t worry, people will not be overtaken by robots. Their roles will change. Stephens believes there will be a need for brand ambassadors, real product enthusiasts.
It will be less about consumerism and more about converting a consumer for life based on the experience they have.
Today’s shoppers are bored, especially the millennials, and they want to be entertained. They don’t stay with brands too long. This is furthering the demise of wholesale as we know it, selling brands to consumers. Over time, the retail store may become a showroom that people pay to enter. The goal will be to win over the minds and heart. It will be less about the sale but we’ll track the experience and its influence on downstream sales. We’ll start looking at the store KPIs like those on a website:
- Repeat visitors
- How long did they stand there
- How many products did they interact with
It’s about one click discovery; rather than adding a new brand. Products are everywhere and easier to find than ever before. Mobile influences purchases so it means finding unique alternatives. Discovery needs to be easy and not dull. The consumer is tired of the predictable and familiar. They want new and unexpected. Therefore we need to look at new ways of selling and distribution.
Charting a New Course
Brands need to break the current sales and marketing plans. They are all too uncomfortable. Brands need to take risks with their annual planning. It may not be successful, but you’ll grow from proving new innovations and learn from risks.
How can a purpose-built Retail Execution Solution impact your business? Let Ian Michelson at Ian.Michelson@afsi.com, or 1 972-715-4044 show you today.