does home delivery mean we never have to visit a store ever again? (future of retail)

healthy eating stores

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Omnia mutantur, nihil interit.

“Everything changes, but nothing is truly lost.”

Neil Gaiman

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Ok.

 

 

 

Because I get to work with some traditional retail folk as well as some cool technology-based e-commerce folk I am constantly being asked my thoughts on the future of retail <as if I can pull a simple answer using my infallible crystal ball>.

 

 

But … me being me … I wade into the conversation with a point of view.

 

 

indulgence shopping is

If you don’t want to read any further … traditional brick & mortar retail is not dead nor will it die … shopping malls will cease to exist in their current form but someone smarter than I will reconfigure the concept and it will come back as a successful concept … e-commerce, even e-commerce combined with home delivery, will not completely replace foot traffic type retail options.
Now.

 

 

Let me be clear … online shopping has absolutely affected the traditional brick & mortar world.

 

 

Will we truly ever HAVE to visit a store? Probably not.

 

Will we truly ever NOT visit a store? Probably not.

 

 

The numbers can certainly look challenging to traditional retail if you stare at them long enough.

 

 

 

But … what I would suggest is that the challenging numbers should drive traditional brick & mortar stores to think smarter & differently about HOW to generate foot traffic <because I do not believe brick & mortar is ever going away … although it may look different in the future>.

 

 

I admit, I do chuckle on occasion, as I view the current traditional retail players freaking out so badly over their business they are flailing about like someone dropped in water that cannot swim.

 

 

 

Before I offer some thoughts on what I would do if I were in traditional retail … let me share some numbers & studies & research to build the foundation for my thoughts.

 

 

– Shopping process has changed with technology <not actual behavior>.

young people communicating technology

 

A study by Local Corporation reflected that in spite of the broad adoption of smart devices & access to internet <and online research> and shopping apps … about 90% of consumers still utilize <and like> the physical store when making retail purchases.

 

 

What has changed is the shopping purchase pattern … therefore the path to purchase has been altered.

 

The consumer purchase used to be a relatively predictable … a fairly linear progression. Now it has become something much more fluid, slightly unpredictable in flow and incorporates a lot more personal investment <utilizing a variety of channels and options throughout the shopping experience>.

 

 

 

– Shopping stores, physical ones, have a diminished role <in the larger sales number scope>.

 

 

If you just look at total retail sales numbers it actually can look okay. The issues are actually reflected when you strip away WalMart <because Wal-Mart continues to do well because of its tremendous buying power, distribution which permits customers to get relatively high quality products for very little money>.

Eliminate WalMart and a great deal of the foot traffic is removed from the industry.

 

 

For a more realistic view of how retail is faring you should look at middle class buying power stores <Ann Taylor, Gap, Banana Republic, etc.>.

 

shopping red cart

Sales decreases can be 20 to 30% <or more> and store closings can be in the 100’s. Stock prices have disproportionately decreased even faster.

 

 

Traditional retail is getting affected by two things <1> the changed shopping pattern means that instead of people going to stores and doing comparison shopping in store they do it online and BEFORE going to a store – this decreases overall traffic as well as time in store, <2> a certain % of sales now occur online.

 

 

Now.

 

This doesn’t mean that there aren’t sales to be had nor does it mean that no one is going to stores.

 

 

Shit.

 

80 of 100 is still … well … 80. And 80 is good and is enough to create sustainable businesses.

 

There is still demand … maybe just too much supply?

 

 

 

– Shoppers are no smarter than they were before technology

 

 

This is my opinion.

 

A number of studies suggest that the shopper is ‘better educated’ on purchases.

 

SmartBaby answer

And on that one … well … I guess I agree.

 

Where I don’t agree is whether they are actually ‘smarter shoppers’ <i.e., better educated but not better selectors>.

 

 

 

Technology has permitted comparison shopping, transparency into gobs of detail and pretty much anything you would ever want to know about anything you may be thinking of purchasing at some point.

 

 

Interestingly … this is great education … but most of us are not graduating any smarter <from the school of shopping>.

 

 

We have a nasty habit of ignoring information we don’t like.

 

 

We have a nasty habit of building an increased value on intangible, non rational, aspects that are important to us.

 

 

We have a nasty habit of weighing known brands better than unknown brands.

 

 

We have a nasty habit of rationally weighing variables well … uhm … until we actually have to make the purchase … when we rearrange variables to the order that is our personal criteria.

 

 

The shopper is certainly more educated … just not any smarter at buying.

 

 

That’s the foundation for my thoughts on the future of retail.

All that said.

 

behavior predict lots people

 

Suffice it to say … there is still foot traffic, there is still gobs of sales dollar for the taking and … well … there are a shitload of people who still like to go to a store.

 

 

As I said upfront … retailers are running around like chickens with their heads cut off … mainly because they have forgotten two things:

 

 

 

 

Anchoring a visit <’wandering in’ to browse is for those quaint streets with little town feel>

 

shop sign

 

– The shopping visit rite <people rarely just ‘point & shoot’ shop>

 
Anchoring a visit.

 

As they run around panicking they are then also throwing whatever shit they can up against the wall <the consumer> hoping something sticks. Huge array of sales items and ‘in store discounts’ seemingly on everything in a store all with the intent to entice you into the store.

 

 

I would suggest that success will not be in volume but rather anchoring visits.
Anchoring them in a key item <think milk in a grocery store>.

If you can anchor a visit the shopping trip almost becomes a ‘pebble in a pond’ foot traffic pattern when in a store <which means the store wins on ancillary purchases>.

 

Wandering aimlessly has never worked … and will not work in the future.
shopping cool barcelonaThe shopping visit rite.
It is silly to think the idea of online sales and delivery can eliminate the sensory shopping experience as well as what can be repeated in that environment in incrementally building retail brand value <because online it gets driven down to the minutiae of ‘effective browsing’, customer reviews and quick delivery – free shipping>.

 

 

Nothing will ever beat the serendipitous purchase of some hideous sweater which caught your eye as ‘perfect for that one moment’ or some silly welcome mat.

 

Nothing will ever beat the distinct aromas floating thru a clothing store or the smell of well varnished wood chip in a furniture store.

 

And nothing will beat the human interaction moments … the silly arguments between two shoppers, hearing the incredulous complaints, observing the shoppers surreptitiously eyeing themselves in mirrors <as if no one ever noticed them doing it>.

 

 

Won’t I miss all that if I shop for everything online?

 

No <says the rational brain>.

 

Yes <says the real brain we live with every day>.

 

 

We all miss those aspects. These are the actual ‘non buying’ experiential aspects which get diminished in an online shopping experience as ‘unnecessary’>.

 

Unfortunately … while unnecessary we tend to like them.

 

They are sensory and experiential and build ‘story value’ to our lives <which is beyond shopping experience value>.

 

 

I loathe shopping itself.

 

I approach shopping in a store with the enthusiasm of a person destined to spend three hours in a dentist chair.

 

 

However.

 

 

I love the people experience … the Life experience as it were … the stories I get to tell and think of.

 

 

I love the extras <albeit it is painful to look at a checkout bill and notice that you have bought something other than what you went in for … and more than what you went in for>.

 

 

We all tend to like the shit you had absolutely no idea you needed … until you see it.

 

 

In addition … think about this <as part of the value of the shopping rite> shopping is what is called ‘a democratizing experience.’

 

 

When in a store … the shopping experience is virtually classless. You can be poor … you can be rich … the experience is the same.

 

 

And that ‘democratizing’ thought allows me to offer up another reason why home delivery will never replace a visit to retail or restaurants or … well … anything out of the home <which you control>.

 

 

First.

Think about this.

 

 

Most of us have made our home into a ‘democratization’ of what we like and are comfortable with.

 

<uhm …. that seems like it could be an argument for never going out …>

 

 

Second.

 

 

Comfortable is great at home … but we inherently desire new & fresh & … well … something different from our ‘comfortable nest.’

 

 

This creates opportunities for outside stimuli to prompt different feelings, perceptions and real behavior. It offers an experience unlike anything you can get in your home <hence the ‘experiential factor’>.

 

 

That is the big opportunity.

 

 

Ok.

 

 

Beyond anchoring a visit and keeping your eye on owning a great shopping rite of passage … let’s assume stores do all the things I suggested … and then do what they really need to do … which is to close stores/locations … they will tap into probably the greatest opportunity for traditional retail’s continued success <if not vitality>.

matters one all

 

Scarcity.

 

 

It’s called the Law of Scarcity … or the Scarcity Heuristic:

In human psychology, the scarcity heuristic is a mental shortcut that places a value on an item based on how easily it might be lost, especially to competitors. The scarcity heuristic stems from the idea that the more difficult it is to acquire an item the more value that item has. In many situations we use an item’s availability, its perceived abundance, to quickly and accurately estimate quality and/or utility.

 

 

And it never fails.

 

If you have a desirable product or service and it is more difficult to access … well … it becomes more desirable.

 

 

 

If most retailers close 20% or so of their stores <I made that number up but I have to envision it is close or maybe a little low>, most of them will avoid not only the pains of the slow degradation of business but also will avoid the inevitable bankruptcy. If the industry prunes the rest will survive and be healthy.

 

< http://brucemctague.com/business-pruning >

 

 

It isn’t an easy decision, or action, but if the big retail operations do the hard thing … well … yes, lots of people will lose their jobs … but others will keep their jobs and the chain will prosper.

 

 

Fewer stores make the ones existing more appealing. That’s the Rule of Scarcity. Bottom line.

 

 

 

By the way … the exception on this point is shopping malls. Let’s say 90+% of shopping malls should shut down <I made that number up>. They are in the wrong locations <while they used to be in the right locations>, conceptually they are not designed for success in their current format and, well … let’s just say the entire concept needs to be rebuilt from scratch and not renovated so they take on Frankenstein characteristics.

 

I am not smart enough to know what the shopping mall of the future looks like nor where they should be located but I do believe a concept built from a blank piece of paper exists somewhere in someone’s mind and will be successful in the future.

 

 

Ok.

 

 

In the end.

 

 

The good news is that technology, or home delivery, doesn’t fundamentally change the behavior of the buyer. While a buyer takes advantage of the internet for research they more often than not remain focused on a path that leads to a leading one waychosen retailer.

 

 

And once inside the store?

 

 

The buyer is the store’s to lose … or win.

 

The responsibility for converting the shopper to purchaser shifts to the retail associate and supporting the really important in-store experience — the other stuff … store experience, people experience, product experience – which is what makes everyone remember why they even like going to a store at all.

 

 

I will end where I began.

 

 

Retail stores will have to change … but … nothing is completely lost.

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Written by Bruce