The Future of Retail — MIMA Meetup Recap
This morning, I had the pleasure of scooting downstairs from my office to our friends, Rocket55, where MIMA was holding a Meetup about retail, and the future of omnichannel. What a great way to start the day. The speakers were Rick Olson, Chris Walton, and Anne Mezzenga. If you don’t know them, a little LinkedIn searching will help you realize they’re pretty brilliant.
Disclosures: I’m the current VP for MIMA. I work at a company, Foundation Technologies, that provides technology solutions for retail clients. I worked for Apple retail for about seven years and was focused on merchandising and operations. So of course, this topic was interesting to me.
So what is the future of retail? Well, that’s always a fun question. Chris talked about how it’s more about finding the right mix of personalities for a party. Ok he said a swingers party, but we’ll just call it a regular, old fashioned party for now. There were the personalities, and then also the retailers that resembled that personality. I really love this, as using archetypes to define and position brands has been part of my “schooling” and overall business experience. Now to be honest, I can’t remember the names he threw down, but I do remember the retailers: Amazon, Starbucks, Ikea, Bonobos, and Casinos.
Those five are very interesting choices.
Amazon changed warehousing. Users saw the ability to buy everything easily.
Starbucks changed payments. Users have a better way to buy, and are rewarded for it.
Ikea changed workforce distribution. Users can save money, even though they hate the experience (Costco fits in this to me as well)
Bonobos changed store footprint and the idea of products on shelves. Users try, buy, and have it shipped to home — no need for bulky bags.
Casinos changed experiences. Users can have fun while losing a bunch of money — pretty epic.
Of those five, only one “change” is strictly looking at the experience. The others were ways to solve operational barriers. That’s an amazing thought. These companies solved interesting questions. Starbucks being the prime example. I cannot imagine the fees that they incurred on every $2 coffee paid with a credit card. By changing that to mobile payments, or their own system, cashflow and rates change dramatically. Over a scale, that’s a huge impact. Ikea thinks it’s ok for you to do all the work in getting your stuff. Huge labor saver. Amazon shifted from book sales to “hey we have all these warehouses, let’s put more stuff in them”. Bonobos survives in smaller footprints with low to no inventory overhead — that’s like a retail ops manager’s dream. For comparison, just think of it from a loss prevention standpoint — Walmart probably has stuff stolen all the time, and that’s basically 2–3% loss across the board if it’s GOOD shrink. And it never is. But if you don’t have to deal with that loss, you save 2–3%. Again, at scale that’s crazy.
And then Casinos. They just want you to stay. They want you to have an experience, because over the cycle of life, you’re more valuable to them when you show up. Period.
I think the biggest thing to realize is that big jumps come from executing operational efficiencies in a user-centric environment. What are your challenges? Is it taking too long for people to check out? That’s where mobile POS terminals can make an impact. Do you have huge stores and that’s your biggest expense — real estate and leases? How can you change that experience to be better, while creating efficiencies in your space? If you’ve already got inventory at each store, does shipping from each store save you warehouse space somewhere else? How crazy would it be to take your warehouse space and convert it into a datacenter for geographic diversity of infrastructure? What are your operational issues that could be solved through creating better customer experiences?
These are fun questions. Thanks to the presenters, MIMA and Rocket55, for hosting. Now, Get Back to Work.