I’ve been reading and thinking about retail innovation a lot lately, which is no surprise. After all, many of our clients here at Ketner Group are retail tech companies, and retailers have been reinventing themselves at a furious pace in recent years as they seek new ways to compete with Amazon.
One of the things that intrigued me is a recent Reuters article about Walmart’s “radical plan” to have its customers deliver packages to online buyers. The plans are still in the early stages, but as the article explains, “shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home,” in exchange for a discount on their Walmart purchases. The retail giant’s ability to crowdsource its deliveries could make same-day delivery a reality, giving Walmart a potent edge over Amazon.
Will this plan ever see the light of day? At this point, it sounds far-fetched. But as one retail pundit pointed out, at least Walmart is thinking of creative ways to reinvent retail.
An article by retail futurist Doug Stephens draws an intriguing picture of what this future might look like. Stephens says “retail, as we’ve known it for at least the last two millenia, is coming to an end…it’s very clear to me that we are coming to a tipping point and data, processing power and connectedness lie at the center of it all.”
In the next decade, Stephens argues, retail will completely shift from a focus on physical and digital destinations and storefronts, to a focus on consumers as the ultimate destination. Instead of consumers deciding which stores and e-commerce sites to visit, retail will in essence start coming to us.
For example, according to Stephens, let’s say I’m on a business trip and my mobile device alerts me my anniversary is coming up in two days. A digital shopping assistant then springs into action—and it knows my wife’s shopping preferences so well that it presents a list of personalized gift suggestions in seconds, pulling information from a number of available storefronts. It finds the best available offer (my wife’s favorite fragrance on sale at Norstrom with a special bonus gift), then makes the purchase and arranges for the most convenient pickup or delivery option. The whole process takes under a minute.
It’s an intriguing vision from Stephens (aka The Retail Prophet). And the future that he describes is already taking shape. After all, the very best retailers compete for our business by analyzing our preferences, understanding our shopping habits, and delivering highly personalized recommendations and offers, sometimes anticipating our wants and needs before we even know we have them. (Check out the chapter, “How Target Knows What You Want Before You Do,” in Charles Duhigg’s The Power of Habit for a fascinating account of how Target analyzes consumer data.)
With all these innovations, though, it seems to me that retailers are simply trying to recapture an era where individual store owners recognized their customers by name, knew their shopping preferences by heart, and conducted business as a series of highly individualized, one-to-one transactions. In earlier days, retail was a highly personal business, and merchant’s storefronts were focal points not just of commerce, but community. Did shoppers need something delivered to their home the same day? No problem, the store owner could arrange it. Did you almost forget your wife’s birthday? Luckily, your local retailer had a timely gift suggestion when you called in a last-minute panic.
So as retail reinvents itself, it’s really just trying to get back to its roots, seeking new ways to make large-scale, mass-market retailing more personal and intimate. Technology may be the enabler, but in the end, what retailers are really doing is going back to the future.