The Store of the Future Should Never Be About Buzzwords
Take, for example, this introduction to a piece I came across regarding the future of store design in one of my favorite daily retail roundups, Retail Dive: What does experiential retail even mean these days? For some it’s sprinkles, others it’s meditation pods. What really matters is localization, service and shareability.
Say what? Come again?
Retail buzzwords are useless. They are meaningless semantic throwaways that bring us neither closer to understanding what the long-term retail future will be nor what the next year will bring. Words like these often sound “futuristic,” but just having a “-tion” suffix on the end of a word doesn’t make it more powerful.
We need to be more demanding. We need to demand less obfuscation from our pundits. We should no longer accept “-tion” suffixed words or nebulous acronyms like AI, ML and the like. Instead, insist on clear descriptions so that when people actually come across a store of the future implementation they understand exactly what they have just seen. A master example of obfuscation is famed Supreme Court Justice Potter Stewart who once described pornography back in 1964:
“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”
The Defining Characteristics Are Clear
Unlike Justice Potter, we objectively know it when we see it. While the ultimate expressions of futuristic retail will be different across brands and retailers, there are a few defining characteristics that every well-designed store of the future will share over the next decade. Three simple rules reveal whether you are looking at a fake or a truly futuristic retail experience:
1. Shopping and Buying Will no Longer Be Conjoined at the Hip
Throughout retail history, the psychological acts of shopping and buying (i.e. acquiring product) have been conjoined like Siamese twins. For decades, consumers have walked into stores, browsed products on shelves and then picked said products off the shelves themselves. Consumers had no choice but to play the role of warehouse workers. With sophisticated digital technologies, like our mobile phones, voice, messaging, visual search, etc., shopping and buying will become entirely separate acts.
Best case example: take IKEA and modernize it with technology. Consumers browse IKEA with pencil and paper in hand to record the names of Swedish furniture they cannot pronounce and then venture into huge back-of-house operations to pick heavy boxes off of shelves only to wait in long lines to pay. Imagine this: they browse the floor with their mobile phones and simply point at the products they want to buy; then robots pick and pack their order as they continue to shop. The consumer now has total power in choosing how to buy and acquire the products that he or she likes with in a frictionless experience.
In many ways, the entire world soon becomes a consumer’s e-commerce doorstep. Want product waiting at the car? Ok. Want it delivered to the house? That’s ok too. The choice is entirely in the hands of the consumer with the quick tap of a button. How consumers shop and how they buy will transform with choose-your-own-adventure technology controls.
2. Data Will Follow the Customer Across Channels in Real Time via Cloud Point-Of-Sale Networks
You would think the above description would be commonplace by now, but it is not. Retailers do not have the same real-time understanding of consumers within the physical world that they do in the digital world. Such knowledge requires finely integrated connection points across retailers’ POS, OMS, and ERP systems, facilitated by cloud computing.
POS is the most important leg in the stool. It’s the transaction log, the book of record for how customers vote day in and day out. So, one of the most obvious indicators of authentic store of the future operations is . . . wait for it . . . a cloud-based point-of-sale system.
A cloud POS system is required to understand customers in real-time (to process and to record their activities in the physical world) and then to be able to connect that activity to all previous or future activities within the digital world as well. Then and only then can 100 percent real-time analysis and personalization (“-tion” suffix pun intended) to benefit the consumer actually happen.
3. Physical Movement Will Be to a Store What a Mouse Is to Web Commerce
Any relevant design for the store of future will take location analytics seriously. Very seriously. Used in tandem with the concepts discussed in points #1 and #2, location analytics will turn a consumer’s physical movement into the analytical equivalent of a mouse moving across a digital screen. Retailers will be able to leverage analytics within both the physical and digital worlds.
Data scientists will use data streams to understand how long customers linger in certain parts of a store versus others and what products they look at and buy or don’t buy. The data will also provide insights on how to drive increases in basket sizes and larger transactions.
My favorite example of the power of data is knowing whether having sales associate Joe was actually good or bad for the customer in the long-run. Human interactions can do as much harm as good, and right now physical retailers have little data on the quality of their human interactions, outside of those horrendous surveys that few people fill out.
There are several ways tech can help. It can be done with a myriad of data-based innovations working in concert: traffic counters, mobile tech, RFID, etc. The solution will be different for different retailers, but at the end of the day, the effort will apply the full extent of e-commerce analytics to the physical world by way of advances in location tracking.
Don’t Be Fooled by the Fakers
Separating the contenders from the pretenders is no easy feat. Following the three rules is a far better litmus test than any Rorschach test-like buzzwords. Fake news abounds about store of the future initiatives, from VR in parking lots to drones monitoring stock replenishment to new private label product introductions on a weekly basis. Sexy PR messaging like this serves as nothing more than tabloid fodder on the shelves of progress.
Many retailers, as much as they try to dress up as futurists, aren’t even close. Not Walmart, not Macy’s, and not even Amazon’s latest and greatest invention, Amazon Go, checks off every box on the list. Amazon Go, while perfect for certain use cases, is just a fancy re-imagination of old-world retail where shopping and buying are as conjoined within the Go experience as Matt Damon and Greg Kinnear are in a Farrelly Brothers movie.
The real art, the real stuff, the good stuff lies somewhere else. It lies overseas. Actually, it lies in China. It lies within the Alibaba Hema Supermarket, and this picture says 1,000 words.
The gentleman in the picture has the entire shopping experience at his fingertips. Should he want a traditional grocery shopping experience, he can have it. Should he want to scan, bag and leave the store having paid electronically without talking to anyone, he can do that too. Should he want to scan product and have the product delivered to his home later in the day, he can do that as well. And all the while, Alibaba’s super data streams record more about this individual’s real-time actions in the physical space, via the cloud, than traditional retailers have ever dreamed.
Alibaba’s conscious experience design choices of separating buying from shopping, of recording every action and reaction in real-time via location analytics, and of linking both its offline and online retail experiences through cloud point-of-sale systems surface up the first, best look at a true store of the future design.
The expression is simple. It is easy to see. It is easy to know. Walk into a true physical store of the future and you will know it right away because your experience will be 100 percent personalized for you, just like it already is within digital commerce today. Walk into a true store of the future experience and your experience won’t be like anyone else’s, anywhere.
That is the next great innovation in retail – the personalized physical store – brought to you by the three main ingredients mentioned above and as clear as day when you know what to look for.