I’ve had similar frustrations with Amazon as I came for the fast free shipping (which is now table stakes), but stayed for Prime Video. The bundle strategy makes sense but the marketplace and third party seller side of the business is a weak point from a price and delivery perspective. Look for more competition from Walmart and others here. Even with that said, the size of their assortment is tough to compete with and even tougher for them to keep the two day promise.
Extending Amazon Go tech to large format stores like Whole Foods is highly questionable. It may not even be viable for Go over the short term given the cost. If the goal is to deliver convenience from a check out perspective, then there are other approaches that should be considered for larger format stores where lines can be a problem. For instance, self-scan options as part of the shopping experience with a quick check at the exit could have a bigger impact. Sure there are some adoption issues but regular shoppers who use it could be given higher service and special checkout to reward usage.
The battleground here is about being convenient. Amazon is very clear on this. Creating transparency around store inventory as a basis for offering online shoppers "convenience options" should be the focus for retailers who compete with Amazon.
Fulfilling online orders using local store inventory could actually save retailers money vs shipping from a central warehouse far away. You have the added benefit of shorter delivery times or even offering the shopper an option to pick it up themselves in the store same day. Both cases boost the retailers convenience game. The value of bringing the shopper in the store is well understood by retailers creating up sell/cross sell opportunities.
Target and Walmart are great examples of staying focused on convenience as a key driver for conversion with curb side pickup and same day shipping options. Most others large retailers have invested in this area as well but not all have mastered the process yet.
Shopper expectations are that these options should be available from all retailers who have physical locations. Look for this to become more of a table stakes scenario in the coming year for more and more retailers.
There is a whole realm of opportunities for connected store employees beyond just sales. They can become brand ambassadors in their social networks with the right content and training. They can potentially help with both the delivery and return cycles. And they can conduct research for both current and planned products and promotions.
Black Friday is no longer just about the day and in-store sales. It’s about overall results and the ability to create an image across platforms that is attractive to the shopper. While overall foot traffic might be down (I'm not sure I believe this) I bet foot traffic was up if you remove older C and D grade malls. Also, the BOPIS numbers are impressive despite it still being early in the adoption cycle for many retailers.
Shopping is still a contact sport for many, so the lines and the coverage will continue for a while, at least another decade or so. What will be interesting is the changeover on how products are delivered to the home. Well before the lines and coverage disappear, many retailers will be moving at least partially to pop-up and showcase locations that will require making arrangements for the products to be shipped. This is one of the last elements of the shopping experience to receive attention from big tech and it’s ripe for the picking.
One more point -- mobile POS is on the uptick and that will benefit retailers in the mid-term future.
Adding pickup options for grocery shoppers is a natural extension to Instacart’s business model as adoption for this convenience continues to grow and is expected. Home delivery is not always the best and most convenient choice.
What will be interesting to see is how well the business model works between Instacart and the retailer because this approach now leverages employees from the retailer doing the pick process. They now having responsibility for properly storing the picked order within a scheduled pickup time window. The additional operational overhead is not insignificant for the retailer. They are essentially paying Instacart for technology but at what price?
In broader retail, the upsell potential for bringing buyers in to the store for pickup is well understood. It will be interesting to see if this is nearly as significant for grocery where it is more likely they get their pickup curbside and never enter the store.
My best advice for e-retailers looking to crossover to the physical space is to bring in brick-and-mortar experts to help with the effort. You don’t want to lose what makes you unique to the shopper, but you need to understand that the fulfillment process is dramatically different in the real world and digital retailers need to adjust their go-to-market strategies accordingly. Also, delivering an in-store experience that is compelling and tied closely with the online side of the business is critical.
In a perfect world, the retailer would know where the shopper is at all times during the purchasing decision. Not just a physical the place, but the mental place. They could then influence the process from start to finish, providing hints, warnings and whatever else is needed keep the shopper loyal. By not identifying the customer until checkout, retailers miss a huge opportunity to influence not only the purchase but also the process of engagement that keeps the shopper happy. It’s a tricky task since there has to be an incentive or a reason to ID yourself. But most shoppers will appreciate the attention and will show it with a bigger share of their wallet.
Transparency is the key here. I like the idea of talking about safety with these kinds of warnings, so the consumer knows exactly what potential issues they may facing. “Safe if used by” or “Use before XX/XX to ensure safe consumption” are two possibilities. This puts the onus on the manufacturer to ensure quality through that date and better guides the retailer on markdowns.
The key for these types of formats is assortment, convenience and fulfilment. Customers need to know the retailer understands them and their shopping behaviors, and the best way to accomplish that is having the right product at the right place and time. They also need to know the it will be as easy, if not easier, to shop there than online or at another brick and mortar while being priced similarly to those alternatives. This definitely takes a heavy effort, not only to line up the variables and conduct the analytics but to make sure the plan is consistently executed at the store level. Just throwing things at a wall to see what sticks won’t work.
It’s interesting that Trader Joe's hasn’t muddied its go-to-market strategy with an e-commerce offering yet. Some of these corporate values might not translate well into digital retailing and not just “the store is the brand.” Being a neighborhood store online would be very challenging, for instance. Would they have regional sub-sites to provide market differentiation?
Of course, they may not enter e-commerce at all, which has its own challenges in an increasingly omnichannel and mobile world. Sure they want to be the friendly neighborhood farmers market of the 21st century. But their customers want more than just a place to shop.
The key to traffic data is who a retailer shares it with, both internally and externally. By using this knowledge as a base of information for everything from shopper marketing and in-store staffing to merchandising and even loss prevention, retailers can better match their tactics to the needs and desires of the customer. By sharing the data with trading partners, the value chain becomes optimized for the purpose of pushing products and services down to the shopper and getting feedback from the shopper more immediately. This then lends itself to more collaboration and better returns for everyone.