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Retailers must turn stores into ‘anything engines’
Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
There is no such thing as a store anymore.
Stores exist in a three-dimensional space, but they are one-dimensional in function. You can only buy stuff there, and usually only a specific category of goods or services. Now, consider Amazon: It not only sells whatever it wants, it does whatever it wants.
Amazon is more than The Everything Store — it’s an “anything engine.”
What exactly is an anything engine? It gets us whatever we want, however we want it, pretty much now. Anything isn’t merely product — it’s also information, videos, photos and communication that can get delivered immediately.
Digital natives are now accustomed to companies that can do everything. That’s one reason why what we used to call stores can’t survive today. They are good for one thing: transactions. If stores want to survive, they must become anything engines, too.
The first convention to get rid of is the age-old focus on transactions and purchase first. Store brands must also finally reject the outdated metrics of same-store sales. When there’s no-such-thing-as-a-store, there’s no such thing as same-store sales, either. And who is already taking these steps? Amazon, Apple and Tesla.
The Amazon credo is simple: It tries anything because it believes it can do anything. There are no hard boundaries on product categories. Convention is the enemy. And there’s certainly no pre-existing trap of the one-dimensional box that is a store.
Apple simplified the branding of its retail locations, editing “store” out completely. Their stores are referred to simply as Apple and the entire brand has evolved into a lifestyle: You can buy helmets that communicate with your iPhone and smart controllers for your lawn sprinklers.
Tesla isn’t trying to sell cars first; instead, their 200 “galleries” are where an entire worldview — a future without combustion engines — is on display. It is promoting Tesla the brand as much, if not more, than merely cars and energy products.
How can brands stuck in the one-dimensional box of single-function stores embrace these changes? Adopt the Tesla/Apple/Amazon attitude of anything goes and rethink principles about what a store is.
Evolve or die.
Discussion Questions
DISCUSSION QUESTIONS: Should becoming an “anything engine” be a goal of all or a select group of stores? How can retailers largely stuck in the box of single-function stores embrace these changes strategically?
Poll
BrainTrust
Anne Howe
Principal, Anne Howe Associates
Bob Phibbs
President/CEO, The Retail Doctor
Sorry, holding up a car brand that has a lot of hype but has a lot of downside, an online retailer who has had decades of free money to play with and a technology company that not only designs but manufactures and controls all of its products as pinnacles of retailing I just don’t buy. I’m sure Apple does care about same store sales just like they do sales of new iPhones. Brick-and-mortar retail has a great chance to reinvent itself and do better just like Lululemon and Target are showing, but saying physical retail is dead I think is right up there with talking about the “retail apocalypse.” Great clickbait but not a statement of fact.
I could not agree more Bob!
Well said, Bob.
Right on!
Retailers that want to play in the “anything” space must first adopt the principle that experiential encounters increase emotional connections with humans, which drives relevance and creates desire. Encounters can happen anywhere and should be activated in many places, not just inside the box. Think theater. And play-based learning. Inspiration comes from fearless imagination, not spreadsheets and price war marketing.
I’m not sure whether the Apple or Tesla model applies to all stores; after all, these are companies selling nothing but a limited selection of their own branded products. For the majority of stores (think discounters or department stores), the challenges of assortment planning and logistics are much more complex.
Amazon is a different paradigm than Apple or Tesla, and its operating strengths (breadth of assortment, speed of execution) should be every retailer’s goal — especially online. But stores that try to be “all things to all people” in their physical locations run the risk of becoming the next Sears.
There are many good points in the article, but I look at it slightly differently. Apple, Amazon, and Tesla are all exceptionally well “branded” companies. That is where most retailers miss the boat. Too many stores focus on selling this and that but without any real attempt to build the brand. Look at fashion apparel, for example. You can go to a mall, and if the store sign was not hanging outside, you couldn’t tell one store from another because they all look the same, act the same and for the most part, sell the same type of apparel. Apple doesn’t need a sign because they have built a brand that everyone knows and quickly identifies with, thus in this competitive world they remain unbeaten. Today there is very little creativity or focus on being different. Instead there are too many retailers copying each other and then complaining about lack of sales and customer loyalty. Finally, look at what helps a business stand out, which is customer service. Apple does it the best. In an Apple store, you hardly ever wait for assistance, and everyone you speak to in the store is well-trained, knows the products and makes sure they satisfy your needs. Walk into most retail stores and try to find someone to help you. If you do see someone, how many times do they answer a question and suggest you go online? So to retailers — if you want to be successful like Apple, Amazon, Tesla and a few others, focus on YOUR brand, what makes you unique, offer your customer something that only you can and, most importantly, WOW every customer with outstanding customer service.
I absolutely agree. Stores need to become centers for experience, customer service, interaction, order pickup, return — everything. We are seeing other retailers move into this arena by stretching things but not doing “everything.” This needs to be about driving traffic. For example Sweaty Betty, a U.K. fitness wear brand, runs yoga classes in some of their stores. Many believe that Toys “R” Us should have become play centers for kids and some DIY retailers are running DIY classes in-store. But to be able to do everything requires a LOT of change and a lot of effort. A lot of the focus is about the people — they first have to be versatile enough to make the change.
Every retailer doesn’t need to become “everything to everyone.” They just need to partner and message intelligently.
I have been an advocate of transitioning from same-store sales metrics to more consumer focused metrics, but without much success. I do understand that retailers who operate in stores must still retain some level of performance at the store level, so they can evaluate individual stores’ performances vis-a-vis other stores or the chain as a whole. However, I totally agree that these stores must migrate from one-dimensional transactions in favor of offering a multitude of in-store options including in-store pickup, delivery, immediate consumption (ready-made meals), customized shopping experiences, concierge services — to name a few.
The Amazon described in the article is not anything like the activity of actually shopping Amazon.com. Shopping Amazon.com is time-consuming. Third-party sellers selling the same thing, way too many choices to wade through, products disappear from shopping carts (stock-outs), price increases in real-time (demand pricing), and the use of collaborative filtering is not personalization, it just puts people into buckets (segmentation). Shopping for a car at Tesla or a technology product from Apple is completely different than shopping for day-in and day-out consumer needs. Nordstrom Local is now taking returns from other retailers, offering shoe repair and stroller washing. “Anything engine”? “Anything store”? Hence the problem with retail today: retailers trying to be everything to everyone equals a complete loss of vision and the reason for being. Amazon- and tech-driven delusional behavior.
With all due respect, the premise of the argument is flawed. I have always been a big proponent of retailers that think “outside the walls” like Rachel Shechtman’s STORY, but nobody — including Amazon — offers consumers “whatever we want, however we want it, pretty much now.” And even granting the author a little poetic license, digital natives are not, ” … now accustomed to companies that can do everything,” because — well — no company can “do everything.” If the argument is that retailers need to be more expansive and creative in their thinking, I’m in violent agreement. If the idea is that a retailer should pursue a strategy of trying to be all things — even impossible ones — to all people, it sounds like a recipe for failure. When you try to be anything and everything to all people you end up standing for nothing. Sure, an “anything store” forces our thinking out of convention, but that path should never lead to incredulity. And while I agree with my fellow BrainTrusters that Amazon and Tesla are poor examples, I’m not sure it’s correct to say that “Tesla isn’t trying to sell cars first.” A cynic might argue that all that, “… future without combustion engines …” discussion is, in fact, just another way to sell cars.
I love the premise of this article — for some brands and some stores, for some day in the future. I am also terrified of the chaos that would ensue if most stores tried to implement this thinking too early in their evolutionary life. This thinking sounds great when applied at the mall level or even at the anchor department store level. I am very skeptical about it at the smaller specialty store level. Too many stores are already trying to shoehorn in too much stuff and as a result are not good storytellers. This is a terrific idea for a very select group of stores — at the right time in their evolutionary life.
Smart retailers are already embracing this concept but, as with anything in retail, they are slow to embrace change. Today’s store is a distribution center and a returns center as well as a transaction center. The showroom concept has been widely discussed with my favorite example being RH Gallery (Restoration Hardware). The author is right that same-store sales is a metric that needs to be redefined. Online sales are influenced by store trips, catalog study and marketing (direct or social). The reality is that the store is not dead but redefining itself. People will always shop as we all need to stimulate our senses or perception of taste, sight, touch, smell, and sound. The store experience is multidimensional and will not disappear but will morph.
This is one of the best commentaries I have read on RetailWire. Lee has a deep understanding of today’s consumer and how to market.
And, as Lee says, the metrics must change. A retailer should not care one iota what they sell in any given store. It is all about what they sell overall. If a visit to a store by a shopper sparks that shopper to like a product and the shopper goes home and in the ensuing 12 months makes six or so purchases online from that retailer, do we really care what each store sells?
It is a matter of mindset. And that mindset can be expanded to almost any kind of retailer. It works for Apple and Amazon, two retailer extremes.
Excuse me, I am going to Amazon to buy a new pair of jeans.
The negative “endless aisle” dressed in new clothing.
It’s fundamental marketing that no one will succeed as an “anything store.” Stores have to have meaning for anyone to shop there — and meaning comes from a curated selection of goods.
Yes Amazon pretty much lets you order anything as long as you I know of it before. But Amazon also doesn’t make profit doing that. And if you need to shop (not just buy), there is no single worse place to shop than at Amazon.
I was also struck by the incredible flight of theoretical fancy — which seems to forget we are selling to human beings. Human beings are physical, live in physical space, understand the physical better, and are NOT capable of living in some theoretical multi-dimensional space — except for a few who have serious delusions.
Haven’t seen a theory this far out in the ozone for quite a while.
There are two ideas here. One is the store and it is critical that the idea of a store be reimagined. What would attract people to this space? Why? What do they want to do when there? Now create the space.
The second idea is the company — how does the company need to be designed and use technology to attract consumers wherever they are with whatever information they want on whatever device or in whatever space they choose? I am not fond of the term “anything engine” because by itself it does not suggest both of these concepts clearly. However, I absolutely agree with both ideas.
Companies that started their businesses in e-commerce have a big leg up on becoming an “everything engine.” They are more nimble, because they can dip in and out of real estate as the market dictates. Consumers know them first in the digital space, and secondly in physical space.
Traditional retailers, on the other hand, are known for their physical environments. Consumers have bricks-and-mortar stores mentally embedded as tangible experiences and street addresses. That means those retailers may not be top of mind for wide ranging digital interactions, even if they could pull it off.