That’s a very long and personal way of saying online retail is not perfect. Not yet.
A few weeks ago, I wrote about all the ways and reasons online companies are putting pressure on brick and mortar. And that fact hasn’t changed. Millennials’ increased desire for curation and delivery, the ease of starting a business with affiliate marketing, and the low barrier cost of not creating a physical store all exist and aren’t going anywhere.
But does that mean brick and mortar can’t compete? No. While its disadvantages are known and well-documented, it still has advantages. It’s immediate, it’s an experience, and it’s still easier to return an item if you don’t like it.
Amazon, with drone delivery, will try and reduce shipping time to a matter of hours, and that may tip the scales, especially when someone factors in travel and parking to a retail location. Augmented reality will do a much better job of letting people visualize a space so that online can compete with Pottery Barn (although I don’t know how you’ll be able to smell-test candles online).
But technology is not limited to online retail. Couldn’t it also save physical retail?
Motionloft, a Mark Cuban company, makes sensors that use computer vision technology to tell the difference between people, cars, and bikes. Retailers use its data to help build better attribution models, increase sales conversion, and trigger proximity marketing.
“The future of retail will embrace neural networks and machine learning devices to get more connected. Analysts will use customer footfall traffic and behavior data to create experiential shopping destinations,” Motionloft CEO Joyce Reitman told me. “Common paths customers take to get through stores will be fundamental for designing aisles and improving merchandising and inventory plans. Dwell time will be used to send highly targeted Bluetooth advertisements to customers’ mobile devices based on where they stand and for how long. The supply chain will be optimized to meet customer purchase patterns in real time.”
If I’m standing in an aisle wondering which peanut butter to buy and one of the brands sends a coupon to my phone, I’m choosing the one with the coupon.
According to Amati & Associates partner Marco Bevolo, Stefano Marzano, former CEO Philips Design, nailed it when he said the retail of the future will look much more like the retail of the past than the retail of today.
“Big data and the social media mobile revolution are on their way to extend personalization opportunities to high street retailers” Bevolo told me. “Retail, therefore, will know ‘you’ as based on your public profiles and data-tracked behaviors, as much as the old shop owner of 50 or 100 years ago in Italy would know every detail about every customer, in order to serve them best.”
Easier said than done. “It will not be a smooth ride toward this future, as in five years the backlash of uberization of services will impact employment, categories, and infrastructure” he added. “This will require intervention by regulators and governing bodies, while cities and citizens will have to find their true authentic soul, beyond gentrification and class divide. Nevertheless, low-hanging fruits and short-term opportunities, from digital mirrors to systemic lighting controls, will already improve the shopping experience.”
The most interesting point in that quote is what happens to participation in the sharing economy when people aren’t making enough money participating or the companies themselves are still not turning a profit. I still think that’s both the present and the future, but it will adjust and fall back to the mean over time.
It also poses what I think will be the most important question of the 2020s: Will people choose convenience over the collective interest of their city, state, etc.? What do I mean? Some of these choices will be obvious. If you choose to have your groceries delivered, fewer people will be employed at the grocery store--although, since there is a driver, that’s a 1:1 trade right now.
If you choose to use a kiosk at a restaurant, that will eliminate fast-food jobs or servers. People won’t feel too badly about that, but those jobs are how many of us funded our high school life and maybe college. If you choose someday to ride in a self-driving Uber, that will eliminate taxi drivers.
Manufacturing is turning to fewer employees and more 3D printers. You can’t blame them. That’s a smart business decision. But it doesn’t take long to imagine a future where 10% to 20% of jobs may be eliminated by automation in the next 10 years. The consumer will save money and be excited, but what happens to the economy when 10% to 20% fewer people are able to buy things?
This is a worst-case scenario, obviously, but an important point to consider when discussing the future of retail. Retail is where we will see this first. We’re already seeing it.
Consumers will choose the best, cheapest, and most convenient option available more often than not. So you have to give them a reason to come to the store. When they are online, they expect personalization. We have the technology to bring that to the physical store experience. If people enable Bluetooth on their phones, physical retail can do a million things. Through alerts, AR, lighting, and music, physical retailers can take shoppers anywhere they want them to go and make it an experience.
And that’s the new key to brick and mortar retail: Make it an experience.