Was Service Merchandise ahead of its time?
"It’s here, or will be soon — the store of the future," begins a new article from WayfinD, WD Partners’ quarterly e-magazine. "Stores will be showrooms and customers can pick and choose the items they want, and associates retrieve the purchased items from the warehouse at the back of the store for shoppers to take home and enjoy."
The article was talking about the defunct Service Merchandise chain, which peaked at more than 400 catalog showrooms selling fine jewelry and a wide array of general merchandise.
While featuring some full-service and self-service areas, the showrooms provided catalog books on tables where shoppers ordered products from a stock room. Customers made their selections known by completing a form on a clipboard, then moved to the "Merchandise Pickup Area" near the exit where a conveyor belt would deliver the order. The showroom approach reduced theft and was also seen as saving shoppers the time and effort of walking the store.
Service Merchandise eventually filed for bankruptcy and liquidated in 2002 after being unable to compete on price and selection against big box stores and internet sellers. It still operates as an e-commerce site.
The concept comes up as e-tailers such as Warby Parker open their first physical stores, often called "showrooms", supporting both physical and online retail. Some such as Bonobo’s only support online sales, while Amazon has some serving as pick-up spots for online orders.
Watching the moves by Warby Parker, Amazon and others, Marcus Wohlsen wrote last year for Wired that Amazon might want to replicate the basic Service Merchandise formula he loved as a kid in the 70’s and 80s’ "to engage the entire human animal" while avoiding in-store inventory. Wrote Mr. Wohlsen, "Amazon could instead focus strictly on the sensory pleasures of shopping while allowing its finely tuned delivery infrastructure to take care of actually getting people their stuff."
The WayfinD article refers to the opening this year by Argos, the U.K.’s general merchandise retailer, of "digital stores" inside Sainsbury’s, the supermarket. Customers are offered a choice of over 20,000 non-grocery products, which they can either buy instantly in-store via tablets, or reserve online for collection within hours, the same or the following day. An extended range of around 40,000 Argos products can also be ordered in-store for home delivery.
"In retail, timing is everything," WayfinD wrote. "With the Internet, BOPIS and shipping from store to home being the call of the day, good old Service Merchandise is starting to look like a great idea that was ahead of its time."
- What If… All stores were like the old Service Merchandise? – WayfinD
- What killed Service Merchandise? – Nashville Business Journal
- Remembering Service Merchandise – The Chattanoogan
- Why Are E-Commerce Startups Bullish On Retail? – TechCrunch
- When Does the ‘Human Touch’ Matter in Retail? – Knowledge@Wharton
- Why Amazon Could Start Taking Business Cues From The ’80s – Wired
- Argos And Sainsbury’s Team To Open 10 New Argos Digital Stores Within Existing Sainsbury’s Supermarkets – EPR Retail News
Do aspects of the Service Merchandise model represent retail’s omnichannel future? What tweaks would have to be made?