The Convergence of Real and Virtual Worlds of Commerce
Retail is changing and it isn’t just about eCommerce. In a land where digital seems to rule, there is still a human need to touch, hear, smell, and experience shopping. Going to the mall with your girlfriends is much different than staring at your smartphone and ordering a new pair of shoes online. The fact is people shop for more reasons than just buying things.
Leftovers From the Industrial Age
In the past decade industrial business has pushed for efficiency, and technology eats efficiency for breakfast. What a match, think of how fast it is to order from your phone. Speed, selection, researching, and better prices, I mean who wouldn’t want that. Well, come to find out there are many people who don’t care about those things when it comes to shopping.
A Tale of Two Shoppers
Take grocery shopping, some people know what they are there for and go straight in and straight out. Other people walk around hoping to find something new and exciting, or they just like to be out shopping. The fact is that the experience of shopping is its own motivation and producer of happiness. In a recent post from The Atlantic, James Hamblin talks about how people often get more happiness from buying experiences and not things.
Based on research done by Amit Kumar, Matthew Killingsworth, and Thomas Gilovich in a paper titled, Anticipatory Consumption of Experiential and Material Purchases, they found people associate negative feelings of impatience when waiting for products but with experiences they feel excited as they anticipate the upcoming event. This can be applied to eCommerce vs retail experiences. Once retailers understand what it is that they have that eCommerce doesn’t, then they can start to structure their businesses around delivering better on those things. Many think eCommerce will swallow up retail, but before retail throws in the towel, they need to understand what shoppers want.
Listen or Die
Technology isn’t going to kill retail, and not even Amazon is going to, what is going to kill retail is not listening to their customers and the market. Efficiency and convenience are only factors for some shoppers. You know what isn’t convenient? Waiting in line for 14 hours for the new iPhone or gaming console, but people do it. Getting in your car and driving out to a restaurant is also not as convenient as a microwave meal, but we do it. We go to Starbucks and pay a premium for coffee when we had a coffee pot a few steps away in our break room for free.
Retailers need to understand what matters to their customers, and this just isn’t happening. Before they spend money trying to create an eCommerce platform, they need to use technology to listen and get to know their customers better. Technology can teach them more about their customers and give them access to ask their customers in a way they have never had before. Businesses aren’t asking their customers what they want, why they shop, and what would make them get in the car and come shop with them.
The Battle Can Be Won
Retail could win the battle for efficiency and experience if they would simply listen and deliver value to their customers. It isn’t about selection, access, or even pricing, retail lets you have the product now, if you want to use your phone and not drive retail can do that, if it is about price they can match it, and selection comes down to crowdsourcing and anticipating what your customer wants. Every one of those battles that eCommerce supposedly has an advantage in can easily be overcome.
The Endpoint is Both
The fact is that retail can do physical and virtual, that gives them an edge over simply eCommerce. New technologies like augmented reality or mixed reality along with virtual reality and mobile will pave the way to a whole new way of creating shopping experiences. Companies like Amazon are already moving into the physical space and should be looking to AR to create more immersive shopping experiences. These technologies will open up new ways to create stories and messaging that become deeper memories driving emotion and brand affinity.
The future isn’t just about efficiency, it is also about experience. When these two come together you are going to see shopping go to a whole new level. I recently talked with Emily Smith of No Campfire Required, a company who designs these physical and virtual consumer experiences. Emily is passionate about telling great stories and connecting people through experiences. Her company designs these experiences using mobile and AR. In our last conversation about what I called On-demand Shopping Experiences, she had this to say:
“The future of shopping is that the store comes to the customer. Digital tools facilitate us shopping when we want, from where we want.”
I felt the same way. Much like eCommerce is on-demand shopping, what it lacks is the shopping experience. There is some efficiency gained by technology, but much of the experience is then lost. Retailers need to integrate technology to add the convenience of eCommerce. Emily said this:
“Digital tools like AR and VR are shopping time savers. Customers no longer have to take time out of their days to go shopping. With these tools, shoppers can browse, try clothes on their avatar, and purchase things they need at any time, from any place.”
Retailers Need to Cut the Cord
One of the major limitations of retail stores is their physical location. Think about desktop computers or wired home phones. The reason they diminished is we created the ability to remove the limitations of location. Retailers are stuck trying to get you to come to them meaning they are dealing with a small sliver of your available time and all the competition for your attention. Further, they may not have a location close to you. With AR and VR they remove the limitations of location and bring the shopping to you. Emily breaks it down this way:
“What if your next shopping experience didn’t include waiting in line? What if it didn’t include physically trying on clothes? What if you didn’t even have to go the mall? Digital tools like AR and VR mean that a great shopping experience can be on-demand, from your phone on the go, or in the comfort of your own home.”
In Between the Lines
The future of commerce is the convergence of physical and virtual shopping. Both retail and eCommerce companies need to be moving toward that goal so they can claim their strategic position in the future commerce environment. This isn’t about leaving behind what you are doing, it is about seeing where things are going and then making the moves you need to so you stay relevant and competitive. Mobile phones are just wired phones that saw the future.
I would love to hear your thoughts on the future of commerce. If you haven’t checked out my latest post on Kahuna, titled: 7 Experts Weigh in on the Future of Retail and eCommerce in an AI World, give it a read, and thanks for spending time with me and sharing my content.