Updated: Mar 24, 2020
The typical narrative for every struggling brick and mortar retailer is that the growth of Internet, Mobile, eCommerce, and other Digital Trends are taking a toll on the revenues and causing store closures. Walmart announced that it is closing 269 stores, Macy’s announced it is closing 40 stores, Nordstrom continues to see decline in its sales (3.3% decrease in the latest quarter), and many others like Target, Sears, Best Buy are all in a similar boat. The continued digitalization and innovation is going to make this even more challenging. The retail companies would have to adapt very quickly to a Digital Enabled & Augmented Retail (DEAR). It starts with the pre-shopping experience.
An Integrated Digital Household Member
My grandma’s way of tracking shopping lists hasn’t changed yet. It is a sticky note, black board and a chalk, a white paper stuck to the refrigerator via a magnet, and others. That is about to change. Amazon’s Echo was a sleeper hit. It got Alexa into the rooms to be part of families where people could simply tell Alexa to create a shopping list and ship it to them. Google Home will soon do that via Android. Apple opened up its Siri so that any retail company could do it. I am sure Facebook’s M, Viv, and many more will follow. The retailers now have to get into the act faster.
Now if one could only say, next time I am at Walmart – remind me to get milk and Walmart remembers it (or) one could say need a washing liquid and it is delivered home via Uber. If you think this happens today or say pilots are underway then think this could be so much more sophisticated when it is done in an integrated way.
A Virtual Reality (VR) Digital Shelf
Samsung Gear VR, Microsoft Holo Lens, Facebook Oculus, Google Cardboard, and many others are beginning to introduce VR devices. These VR devices are great at simulating an immersive sense of a given location. While these VR devices are being built for a B2C environment, there is a huge opportunity in the B2B space. Assume, the retailers either give away the device for a loyalty play and embed digital stores that the users can simply use to immerse and buy from the VR Digital Shelf. At a minimum, the retailers can insert themselves into a consumer shopping app.
This VR can also be integrated into an Augmented Reality (AR) and people can position a furniture in a room or visualize them in a new attire, and much more. No one really needs to go into a store to buy.
A Digitally Enabled Saving Mechanism
Everyone loves saving money and many of us are creatures of habit. Once we settle upon a Shampoo, Perfume, Deodorant, Brand, and such essentials and we repeat the same buying patterns. The retailers know all about what and when someone buys something and when they are likely to run out of it. However, little to nothing is being done turn that data/insights into convenience. Instead of randomly delivering coupons, retailers can do more to provide targeted coupons, just-in-time savings, and so on. As a matter of fact, there is a “service-driven business model” that the retailers are missing out on. In essence, for a monthly or quarterly fee all the essentials should be delivered on-demand for a fee. It is a budgeting safety-net for buyers and guaranteed revenue for sellers.
There is a potential business model innovation for the retailers. Yet the retailers are very slow to move on it and relying on credit card companies like American Express to come up point systems like Plenti.
There is a huge opportunity to convert a potential pre-shopping experience to revenue. The current retail experience as it stands is broken for a digitalized future. There is so much the retailers could do. The challenge is investing while revenues are shrinking. Is this is time for some rainy day funds? What do you think?