Jul 02, 2017Last week, I wrote about how conventional retailers were struggling with the changes brought by online retailers (see A Cautionary Tale for Conventional Retailers). It's easy to diagnose the problem, but it's always more difficult to suggest a solution. I'm not a retailer, so I am not intimately familiar with all the issues companies are facing, but here's how I see the future of retailing.
Online retailers have a single competitive advantage: convenience. Instead of driving to a store, combing through racks of clothing, trying items on and then buying them, shoppers can now—at any time of day or night—sit at a computer and comb through items. These are typically well organized, making it easy to find the style, color and sizes they like.
When shoppers buy something online, they can get the right size, style and color every time, but if what they receive doesn't fit, they can often use a return label to send the item back, sometimes a no cost. While returns are something of a hassle, the experience of buying online is efficient and convenient.
Conversely, when you drive to a store, you need to find parking. You often don't find the style, color or size you want (inventory accuracy at stores is only about 65 percent), and you often must wait online to pay. No wonder online sales are growing so much faster than in-store sales.
If I were appointed CEO of a retail company, I would look to close the convenience gap that online retailers enjoy—and build up our own competitive advantage that online retailer can't easily match. To improve the instore shopping experience, I would use RFID technology (naturally) to ensure that I always had the customer's color, size and style in stock when they wanted to buy it. I would use an app to allow them to browse styles on their phone or online and locate those exact items in the store quickly and efficiently. I'd make it so anything could be viewed on the Web, on a smartphone app or in the store at any time, and be picked up or delivered within 24 hours.
I would eliminate any internal distinction between online and in-store sales. Sales would be sales. Associates in the store would be familiar with our app and website, and would show customers how to use these to find and buy specific items while in store and pick it up at the store. Customer support online would have access to the inventory in stores and direct customers to specific stores when appropriate.
Sounds obvious, right? But so far, only a handful of conventional retailers are doing it.
The last thing I would do is leverage the one thing online retailers don't often offer: helpful sales associates. In the United States, at least, retailers have seen people as a cost to be minimized. I would pay workers more and train them to be helpful.
A few years ago, I went to Bloomingdale's to purchase a new jacket to wear at our RFID Journal LIVE! event. The gentleman in the men's department who helped me was older and clearly had worked in retail his whole life. He knew the inventory inside. I picked out a few jackets I liked, and he helped me choose the one that looked best on me. He helped me find a shirt and pants that worked well with the jacket, and I left the store feeling good. I knew I would not look like a bumpkin on stage that year. I went back the next year for a jacket and the year after.
Here's the thing a lot of companies are missing: People have questions. Often, you spend a lot of time online trying to determine whether a product is right for what you need it for. The is inconvenient and inefficient. If customers could go to a store knowing they would get answers to their question and come home with the right product, they would go to stores more. And when they go to stores, they often buy things they didn't expect to buy.
So in my mind, the way in which brick-and-mortar retailers compete is by using technology to match the convenience of online retailing, and by offering expertise that algorithms online can't offer. Let me know your thoughts about the future of retail.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.