The Future of the Retail Store
The future of the retail store – what does online mean for bricks and mortar?
Earlier this year Netscape founder Marc Andreessen controversially claimed that “retail is dead”. He believed that online competition will result in the complete extinction of physical stores. But is this view a bit extreme? Founder and CEO of Retail Prophet, Doug Stephens thinks so.
Speaking at the Online Retailer Conference, Doug strongly believes that in fact the future of retail will involve important roles for both physical and online. And this is largely because we don’t go shopping just to acquire things. It’s like saying we go to restaurants just to eat food. Shopping is a social ritual.
The statistics show that online retail is growing. 2013 will see an estimated $1.2 trillion in ecommerce sales around the world, which equates to year-on-year growth of 19%. Doug argues that is completely conceivable that by 2022, online will account for 30% of all sales. Buying online can offer convenience and competitive prices.
But shopping is about more than convenience and competitive prices. It also offers an opportunity to satisfy our deep human need for social interaction. Doug uses the example of people camping outside Apple stores for days or even weeks to purchase the latest iPhone or iPad. They could just buy the product online, or even in store a few days later. But it’s the experience they are there for.
Everything we know about retail is changing and, according to Doug, mobile is the accelerant on the fire of this change. The increasing popularity of smartphones is giving consumers greater access to information and products than ever. We think – and expect – that we can get anything we want, whenever we want, where ever we are.
We can already see a lot of innovation in how retailers are seeking to meet those expectations.Kate Spade created digital windows in New York which showcased products and offered a large touchscreen monitor to browse and purchase items. Your item will be delivered to you in New York within an hour – 24 hours a day.
Doug’s advice to retailers in the face of this change is to stop thinking about channels. Think about moments. Online technology offers your consumers the opportunity to buy your product in any moment. Your physical store, meanwhile, offers your customers experiences and moments to fall in love with your brand.
In the future your physical retail store will be less about distribution. Purchase and distribution will happen increasingly through online channels. Doug believes your store should start to focus more on “distributing experiences”. The store will be less about taking something and more about experiencing or making something. One example of this is Sport Chek, who have created a concept store in Toronto [VIDEO] where physical and digital collide. Using 140 screens throughout the store, customers can play with products, view live Twitter reviews, request sample products to try, and even design and order their own custom Reebok shoes.
According to Doug, the future of retail is very much “phy-gital”. It’s no longer about one or the other – it’s not a debate. Doug’s final advice is that you should stop competing to be the cheapest. You need to let your store be a source of media that gives remarkable experiences so that customers will want to buy your product in any moment from any channel that best suits them.