The Store is Dead! Long Live the Store!
Through a special arrangement, presented here for discussion is a summary of a current article from Tenser’s Tirades.
The distinction between online and off-line retail sales grows blurrier by the minute, as shoppers meld their consideration and purchasing behaviors into an "all-line" shopping continuum that spans brick, web and mobile.
"The war for store traffic will be won or lost on digital," said Margo Georgiades, president of Americas, Google, who spoke April 23 at the 19th Global Retailing Conference sponsored by the Terry J. Lundgren Center for retailing at the University of Arizona.
In 2010, U.S. retail stores recorded 39 billion "footsteps" in November-December, she reported. By the same period in 2014 that number had declined to 18 billion. Despite that huge drop-off in store traffic, store revenues grew for the same periods from $641B in 2010 to $737B in 2014.
"Smart phones are changing everything," Ms. Georgiades said, arguing that they create an imperative for brick and mortar retailers who want to keep their customers engaged and buying. She shared three key propositions:
Photo: Whole Foods
Own your tribe. "Are you winning your fair share of traffic before the store? Do you obsess about all their life moments and present in an authentic way, with messaging focused on content, versus product?"
Commit to all-line. "There is no off-line or online. Making omnichannel real is not easy. Mobile forces you to think about the seamless experience."
Deliver surprise and delight. "Go from demand to suggest. Are you truly using data to understand your customers and their context? Are you delivering curated experiences and magic moments?"
Ms. Geordiades was joined by C-level executives from retailers including Macy’s, REI, PetSmart, Teavana, Whole Foods, Sephora, Gilt and The Container Store. Many made reference to the impact of digital on their businesses.
The digital proposition is so important to Macy’s, now recognized as the seventh largest digital retail business globally in addition to its 800 stores, that it has invested in its own Bay-area Idea Lab, said Terry Lundgren, CEO. It recently introduced an image-search extension to the Macy’s app to help shoppers locate desired items by taking digital snapshots.
"Where does the sale belong?" Lundgren asked, then answered, "I’m agnostic about whether it’s in-store or online. Let the consumer choose where."
Walter Robb, co-CEO of Whole Foods, conceded his company had made its move to digital technology a little late, but stepped forward last year to embrace what he prefers to call "extended experience." He offered as proof: "We are the largest Apple Pay retailer so far."
- The Store is Dead! Long Live the Store! – Tenser’s Tirades
- Global Retailing Conference 2015
- Macy’s fires back at Amazon with showroom-busting image search app – Mobile Commerce Daily
Is the proportion of online versus offline retail transactions approaching equilibrium? In an “all-line” marketplace, how vigorously should retailers compete for digital traffic? Can pure play, all-digital competitors expect to stay competitive without expansion into brick and mortar?