What Does Retail Really Mean?

Let’s assume for a moment that we are defined by what we buy. If this is the case, then Amazon spells the future of retail and therefore of us as individuals. Their recent flurry of innovations blows the mind in their brilliance and capacity to redefine our relationship to buying.

Let’s start with the innovations we know to be true. Prime Now is a new service that’s spreading across the states quickly. It promises Prime members in certain zip-codes one-hour delivery of any of 25,000 products for a fee of $7.99, and 2-hour delivery for free. This is brilliant is for two reasons — consumers desire immediacy and Amazon will likely reduce their $6 billion packaging and delivery bill — what the industry calls the last mile. Prime Now has already launched in Atlanta, New York, Miami, Dallas and Baltimore.

The second innovation we know to be true is the arrival of the Dash Button, a small wifi enabled button that’s branded with the key products you have to replenish on a regular basis, like Tide or Gatorade. You stick the button around the home, on appliances, or wherever you think is best to prompt you. When you need to order more product, you simply press the button and the product is sent to you. This is like the intelligent fridge we were always promised that would work out when to replenish milk, etc, except Amazon found a way to bypass the electronics manufacturers and just use smart tech to leave the power in your hands. As Re/code heard from Amazon, “We want you to go from ‘I want that’ to ‘I bought that’ in 10 seconds.” Basically Amazon’s strategy here is to help shrink the time between “want” and “buy.”

Now we come to the really interesting concept revealed through investigating patents. This one lives under the banner of speculation for now. Amazon applied for a patent that would be a first step into a lasting physical space. The idea is to have retail stores where you walk in, pick up what you want, and then leave. No shop-assistant interaction. No payment interaction. You just walk out with whatever you picked up and the technology does the rest, charging your account.

The one question I asked myself after the excitement of this speculation was, doesn’t something like this already exist? Apple immediately came to mind. If you have the Apple Store app on your phone, you can just scan the barcode of a product and walk out the door with it. So yes it is pretty similar. What’s interesting is Apple’s shift to the concept of “Get in line, online.” As Angela Ahrendts stated, “The days of waiting in line and crossing fingers for a product are over for our customers. The Apple Store app and our online store make it much easier to purchase Apple products. Customers will know exactly when and where their product arrives.” She then states to her staff, “This is a significant change in mindset, and we need your help to make it happen. Tell your customers we have more availability online, and show them how easy it is to order. You’ll make their day.”

On walking into the job at Apple, Ahrendts had three key issues to attend to. The first was the diminished morale of the blue shirt staff at Apple stores and stories of sloppiness that were growing in number by the day. The second issue was that the online team felt like the less-favored child in the retail relationship. Physical and online were kept completely separate. Analyst Horace Dediu, stated in Fast Company that this has been “a historical failure” at Apple “neglecting how shoppers actually shop.” The third issue was speculation that Ahrendts would most likely best align to Jony Ive, someone who has always been sharply critical of Apple’s approach to sales as selling too hard. The announcement from her this week states firmly for me that she is taking on all three challenges directly, and if done well, will solve many of the problems she had to deal with coming in.

So, on hearing of Amazon’s desire to create a world of mindless purchasing and Ahrendts’ desire to push sales to online channels, one could immediately come to the conclusion that the future of retail is going to be fully digitized. The error in this assessment is the assumption that retail means simply the buying of goods. If you look at the etymology of the word ‘retail,’ you get lost in the Anglo-Norman French word retaille, which literally means ‘a piece cut off,’ but if you look at the Webster Dictionary definition, it states ‘to sell something to customers.’ The truth is there’s more to selling than just buying and that’s why I would argue that what Ahrendts is doing is to ensure that selling is happening at the store instead of fights in the waiting lines. For Amazon, I deduce they’re going after the big box retailers and the mindless, necessary purchases where price is a key factor in loyalty. Attracting these low level loyalists to switch to a more convenient option, as long as the price matches, should be an easy and highly profitable target. Their success here is more likely than their lackluster attempts to get people to use Amazon for the likes of fashion. As a side note, it’s interesting that their first physical store has returned to the core of their offering — books — which makes complete sense as books exist in their own world and are ever more relevant today than they’ve been in a while.

To conclude, I would argue that we are defined by what we buy into rather than what we simply buy. We buy into Apple and Nike for what these represent to us and those around us while we simply buy Tide because we are convinced it does the job. The role of experiences is an increasingly powerful tool in helping consumers buy into a brand and that’s why demand for brand experiences is increasing at a rapid rate — it’s why Ahrendts is giving it the space it deserves in Apple stores and it’s why Amazon is a long way from defining who we are.