All the big retailers are struggling. Walmart announced that it is closing 269 stores, Macy’s announced it is closing 40 stores, Nordstrom continues to see decline in its sales (3.3% decrease in the latest quarter), and many others like Target, Sears, Best Buy are all in a similar boat. The typical narrative is that the growth of Internet and eCommerce is happening at the expense of Retail Stores. Well, it is about to get even more challenging. The retail companies would have to adapt very quickly to a Digital Enabled & Augmented Retail (DEAR).
A Digital Household Member
Over the years, all of us have a mechanism to write things down for essential purchases — it may be a blackboard with a chalk, a sticky note, a white paper stuck to the refrigerator via a magnet, and others. That is thing of the past. Amazon’s Echo hits a sweet spot here and very soon Apple, Android, Microsoft, Facebook and others will follow-suit by simply building on the ability for us to activate Siri, Alfred, Alexa, Cortana, M, or whoever and tell it to add Milk to the shopping list. Now if the retailers could integrate and we could simply say — “Next time in Stop and Shop (or) Walmart — remind me to get milk”.
The retailers need that data and level of integration. Next time, I am in the store, this should be all set ready to go.
A Digital Planning/Marketing Tool
Think Virtual Reality meets Amazon’s Echo on a SmartPhone at Home. While this may be a complex device it is close to us. It may even be the next iteration of Google Glass. The moment we wear this device, we are able to envision our home with a certain furniture, see ourselves with a certain fashion, envision ourselves with a certain jewelry, visualize ourselves in a certain car so on and so forth. They can even pulse it with their social circle and get feedback.
The Virtual Reality (VR) has to evolve from being this geeky looking headset to something more cool that everyone can use. Eventually the Digital Planning Tool will help consumers plan their choices and show up to a store and eventually make the call. Now which retailer is ready to engage in faster than the others?
A Digital Shelf
Many of us are creatures of habit. Once we settle upon a Shampoo, Perfume, Deo, Brand, and such chances are we repeat the same buying patterns. The retailers know all about what I buy, when I buy, and even when I am likely to run out of it. However, little to nothing is being done turn that data/insights into convenience. How about when I walk into the store, a digital shelf is created based on my needs. For essentials that really do not need me to experiment or think, it is a matter of simply adding to my purchases. For things, I’d like to explore (e.g. fruits and vegetables) and experiment (e.g. clothing), take me over to the traditional experience but in a contemporary style.
Pop up Digital Shelves
What if, the retail stores were simply digital shelves that popped up in bus-stations, train-stations, and even within the communities. It is much akin to the passive menu cards you see on drive through. People can simply place orders for the essentials and pick up to go. A much smaller option would be to do it on Smartphones.
A Connected Mannequin
The mannequins are still passive. They need to become more digital, switch fashion dynamically, and be connected. Imagine if a mannequin were a digital representation of you and based on your own taste and buying patterns displayed clothes that you could simply checkout on a few taps or even better talk to the mannequin. These connected mannequins can now post fashion over to the Internet and social sites and soon turn into a marketing opportunity. There is a whole ecosystem that could be built out of a mannequin.
An Augmented Fitting Room
What if you walk into a fitting room, look at the mirror, and simply select the clothes you want and it showed you in that attire. Your digital representation on a mirror shows itself in a different clothing. You can then narrow it down to a few and then try them on if needed. Oak Labs and Polo are trying an experiment in the New York store (read about it here) but there is a lot more that can be done. As a matter of fact with VR we may see a sci-fi like fitting room.
Retail Stores as a Platform
Retail stores have something that online stores don’t and vice-versa. If the Retail Stores were the platform to allow inventory, pick up, and delivery then the online components can simply become a distribution channel. Absolutely no reason why I shouldn’t be able to go on Amazon and order a few things then pick it up at a Stop and Shop (or) have Stop and Shop deliver it to me. It is a new type of win-win collaboration that would work for everyone.
Bill of Material UpSell
Have you ever been in a situation wherein you purchased a refrigerator and after a few months need to buy a filter? The challenge — you need the refrigerator model number and then need to know the exact model number (or) SKU number of the filter. You can just about apply it to anything — plates on a toaster, water filter, furniture, and anything. Retail misses the opportunity to organize this for you in a way you can effectively manage it and even better upsell. After someone purchases a certain refrigerator and it works, chances are they would give the Television set from the same brand a look.
Amazon has done a great job of reviews, discussion forums, and help. There is a huge missed opportunity on all retailers to build loyalty. For example, the entire coupon system is a huge mess. Delivering coupons that have 20% discount on meat to a guy who never purchased meat is just a lot of noise to sort through. It is one lost way to build loyalty. Ditto on reviews, forums, help to move items purchased, and a lot more…
Lastly, Leverage Data to build an Individual Digital Persona
The retailers have so much at their disposal that they can create a digital persona or a twin but except for Amazon none of them have managed to do so. The Digital Persona’s are going to simply going to help companies get more targeted and personal. Instead of building stores, remodeling, closing them, or going down the path of discount pricing, the above investments will serve the retailers to remodel themselves for a digital future.
The Digital Enabled & Augmented Retail (DEAR) strategy should position the retailers on this path. A lot of it is easier said than done but the beginnings have to be made.
What do you think? Can you imagine the possibilities? Please let me know your thoughts via the comments below.
Image Credit: Sourced under Creative Commons from Atos. Click here for the actual source.