Amazon can be stopped

Discussion
May 08, 2015

Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly publication dedicated to the future of consumer culture from the retail and foodservice experts at WD Partners.

A recent survey-driven study published in the Journal of Consumer Marketing concluded that Millennials are "less likely to purchase online compared to their older counterparts."

The significant caveat: Gen-X and Boomer shoppers may buy online more, but Young People (AKA Millennials) actually use interactive technologies more for "utilitarian/information gathering purposes and entertainment."

These findings suggest the survival of the store instead of its much-prophesized demise but also reveal a distinct cultural and generational shift: Young People turn to technology not just for practical reasons, but to meet emotional needs.

Technology isn’t simply something that helps Young People get something done, i.e. make a purchase quickly and efficiently. Technology and interactive media play a role in identity formation and lifestyle. Online shopping doesn’t do this for people. It’s merely a convenience.

Yet a growing body of research indicates stores that fail to play an influential role within digital channels where young people pre-shop, socialize, and participate in virtual communities first, won’t get the sale in the end. Young People want to do more than consume; they want to co-create, participating in the emerging sharing economy. With the rise of the makers and locavore movements, and even seemingly niche trends like the resurgence of home-based and craft brewing, it’s time retail environments built on active consumption.

Millennials shopping

Photo: Honeywell – Pictured: Dolphin 75e mobile computer

Active retail is intentional. If passive retail was defined by mass-market products designed for many, the new era of active retail reflects the consumer desire for mass customization, with specialty products, from sneakers to jackets, designed for one. Rampant pre-shopping by Young People, or "information gathering," means the serendipitous, impulse-driven buy is more likely to reflect the culmination of countless digital-based interactions prior to the consumer even entering the store.

Active retail makes associates enablers of experiences vs. managers of transactions. Associates must evolve into concierges. They must be community champions that engage with shoppers to co-create what’s next in fashion, not just ring up sales. This turns the store into a space where consumers can influence consumer culture, interact with stores associates and, most importantly, each other.

Active retail gives consumers a voice inside the physical store, not just online. While it has always been a place for gathering and for expression, the store has yet to rival digital’s data-based commerce format, where countless consumer reviews and ratings are commonplace. Nordstrom already tags popular items on Pinterest inside the store. It’s time for retailers to create events that give consumers a way to have as much influence over future inventory choices and fashion trends as corporate buyers do today.

Active retail responds to what is at the heart of the revolutionizing force within all of commerce — consumer empowerment, not their continued passivity.

Do you see a major shift from passive to active shopping at physical retail? Is the active retail theory described in the article the answer for recreating physical stores for Millennials?

Braintrust
"This is not really a surprise. Someone said the most provocative thing to me on a briefing call about a year or so ago. He pointed out that in 1990, the percentage of sales that consummated at call centers was roughly equivalent to the percentage of sales currently consummated online."
"This seems to be a bit of a stretch. The behaviors described are not limited to any one age group. The underlying curiosity appears to be Millennials’ behavior, which is certainly an interesting topic, but only addressed partially here."
"Millennials are "less likely to purchase online compared to their older counterparts." Not buying it. Physical retail will continue to lose share to online in the coming years, in my opinion."

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12 Comments on "Amazon can be stopped"

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Max Goldberg
Guest
2 years 7 months ago

Rather than worrying about being passive or active, retailers should focus on the basics: customer service, inventory and omnichannel. Being there when consumers want to find something will generate more sales than giving consumers a say on future inventory.

Paula Rosenblum
Guest
2 years 7 months ago
This is not really a surprise. Someone said the most provocative thing to me on a briefing call about a year or so ago. He pointed out that in 1990, the percentage of sales that consummated at call centers was roughly equivalent to the percentage of sales currently consummated online. In other words, he posited that there was a limit to the volume of sales that would move online, and we were close to it. The store will be reinvented. Less because of Millennials and more because retailers shifted way too far to the self-service side in the early 2000s.… Read more »
Keith Anderson
Guest
2 years 7 months ago
My concern when seeing studies like this or comments about Amazon’s “not proving it can make a profit” is that traditional retailers will interpret this as evidence to do nothing differently. My old firm RNG has great insight on the topic of Amazon’s financial model, but in the public domain everyone should read Benedict Evans of Andreesen Horowitz: I would also note that every year, prominent analyst firms forecast that e-commerce sales will grow for the current year at their historical run-rate (around 15 percent YoY), then taper to 8 to 12 percent YoY growth over the forecasted five-year period.… Read more »
Herb Sorensen
Guest
2 years 7 months ago
I defined active retail years ago as a retailer moving out of the “merchant-warehouseman” mindset into the “personal selling” mindset, not through more and better staffing, but through more and better THINKING! See: “Selling Like Amazon… in Bricks & Mortar Stores!“ For why Amazon will keep eating brick-and-mortar stores’ lunches at their leisure, see: “The Problem: “Parked” Capital” However, unless Amazon moves into brick-and-mortar stores themselves, brick-and-mortar stores will continue to be their sitting ducks. The way forward is laid out in those two links. And “As long as shoppers live in bricks houses, they will shop in bricks stores!”… Read more »
Dan Raftery
Guest
2 years 7 months ago

This seems to be a bit of a stretch. The behaviors described are not limited to any one age group. The underlying curiosity appears to be Millennials’ behavior, which is certainly an interesting topic, but only addressed partially here. Plus, why call out Amazon in the title?
Associates enabling an experience is a fine goal for trendy retail outlets, but on the other end of the scale, where the experience ranges from mundane to painful, associates who manage transactions with pleasant efficiency are very valuable and increasingly challenging to find within the Millennial generation.

Gordon Arnold
Guest
2 years 7 months ago
Anyone with a wireless phone is online. This is also true for digital television and radio. Every non-cash reported transaction is tabulated, reconciled and recorded over the internet. This is a fact for any generation making us all equal in e-commerce use and proliferation. As for active and passive customer support the discussion would be better served comparing the benefits of store associate vs. digital assistance. A brick-and-mortar store has two mandatory tasks that are equal to or supersede direct customer support. They are and will remain so for the foreseeable future. The number one focus is safety followed by… Read more »
Grace Kim
Guest
Grace Kim
2 years 7 months ago

“Young People want to do more than consume; they want to co-create, participating in the emerging sharing economy” is absolutely spot on summarizing Millennials. Technology like Yelp, TripAdvisor and reviews shared on Amazon product pages really emphasize today’s trust economy where shoppers seek advice and candid reviews left by other shoppers. The more retailers facilitate a community for their shoppers with crowd-sourced, value-add information, the more success they will see.

Richard J. George, Ph.D.
Guest
2 years 7 months ago
Not necessarily. My recent national research on Millennials’ food shopping behaviors suggest that they do a significant amount of online food shopping. Almost a quarter (actual = 24%) of Millennials indicated that they shopped for groceries via online, Internet, or mobile in the past 30 days. The comparable number published by FMI is only 8%. On the other hand, 56% of Millennials shopped at a regular or full service supermarket in the last 30 days. This number may be compared to FMI’s number of 89% of all shoppers surveyed, who indicated they shopped at a regular or full service supermarket… Read more »
Tom Redd
Guest
2 years 7 months ago
Herb was on this topic years ago, and he is right that Amazon cannot be stopped. They will shift to brick and continue on as a warehouse type retailer. They will try some specialty shops, different delivery modes, and more. All the noise they will make is not for the shopper—it is for the press and Jeff’s desire to always be in the news. Amazon will come to the pavement and over time will settle into a Service Merchandise model that will make some people happy and others wander past the store and the web site. Sure , they can’t… Read more »
Bill Davis
Guest
2 years 7 months ago

Millennials are “less likely to purchase online compared to their older counterparts.”  Not buying it. Physical retail will continue to lose share to online in the coming years, in my opinion.

Craig Sundstrom
Guest
2 years 7 months ago
Well, who doesn’t want to be participating in the rise of locavore movements? What I took away from this jargon-heavy pep-talk was that:(1) young people spent a lot of time online for…gee, practically everything;(2) the more ways companies find to engage their (potential) customers, and the better they are at it, the more likely they are to sell something (assuming competitive pricing and service-levels);(3) We can all relax: Amazon will not continue its exponential rate of growth and capture 400% of the nation’s sales (or whatever some naive extrapolation comes up with). On a more technical note, I’m (still) dissatisfied with… Read more »
Karen S. Herman
Guest
2 years 7 months ago
Great excerpt and excellent points on active retail. Although it is based on a survey driven study targeting Millennials, I don’t like the limitations it sets in regard to older shoppers, including Gen-X and Boomers, many of whom are just as connected to devices and social channels and actively participate in co-creation and co-ideation within their favored communities. Physical retail environments are an excellent place for shoppers to act on their virtual creativity and retailers that embrace active retailing, providing products for customization (have you visited a Hallmark HMK store?), sales associates who curate and serve as stylists, and ample… Read more »
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Braintrust
"This is not really a surprise. Someone said the most provocative thing to me on a briefing call about a year or so ago. He pointed out that in 1990, the percentage of sales that consummated at call centers was roughly equivalent to the percentage of sales currently consummated online."
"This seems to be a bit of a stretch. The behaviors described are not limited to any one age group. The underlying curiosity appears to be Millennials’ behavior, which is certainly an interesting topic, but only addressed partially here."
"Millennials are "less likely to purchase online compared to their older counterparts." Not buying it. Physical retail will continue to lose share to online in the coming years, in my opinion."

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