Following on from yesterday’s post about travel, this blog is about retail and the future of shopping, which is timely given the plethora of shopping options in the United States.
It’s got me thinking about a meeting I attended the other day to discuss the New Zealand economy where the concept I’m terming ‘resist or adapt’ emerged. Given Taupo’s reliance on retail as an industry, inevitably the topic of online shopping was raised. A great debate raged asking how to collect taxes on overseas purchases, how customer expectations about shopping experiences are changing and why people don’t buy local more often. NB – They even have “buy local” at Safeway supermarket in San Francisco, with over 300 local items.
After a lengthy discussion which was essentially about ‘how do we stop or tax people shopping online’, a man who had kept quiet the whole time spoke up. He explained how he had moved back from a big city overseas where he had been on good money and had now bought a retail business. He then delivered a line which at the time I don’t believe sunk in, but it’s stuck with me ever since – ‘you can’t fight this, you have to adapt’. He then backed this up with examples of how their business was facing the same challenges regarding where people purchase but they were choosing to embrace an online channel including using online media content to attract customers from outside of New Zealand.
What is the future of shopping then? This Harvard Business Review article is insightful in that most of what it talks about has happened four years later which is unusual for technology articles. Here’s some of my thoughts for what this means.
As a consumer, not much. Except that you will keep on shopping the way you have done, and in five years we will probably be shopping even more differently than today, we just don’t know it yet.
Change and action is needed on the supply side though.
Business model reality check. Unless people have not done so already, business models will need to be examined to check if they are still relevant and adapt if possible. This may mean the harsh reality of shutting up shop but it might also create opportunities like changing suppliers, product ranges or markets. Online is no longer optional but a necessity. The best websites now allow you to do everything you want including comparing product features objectively, creating a wishlist, offering related products, seeing customer reviews, the ability to deliver or pick up in store, and the list goes on. To put things in context, Amazon has had 20 years to develop their very intelligent website.
Customer service is king. Now more than ever! Word of mouth still exists, but now it is online in the form of ratings websites or social media, where word of mouth is permanently on the internet. Tourists in particular use online sites as key decision platforms – so if you don’t have an online presence you are unlikely to exist in their eyes and if you rate poorly then forget it! Are we in the age of the return of good old fashioned customer service training?
Physical shopping environments that customers love. Customers don’t tolerate web sites that are five years old so their expectations of streets, building facades and in-store retail experiences are no different. Will the increased spend on these translate in to a return or are rent yields going to decrease, just like the new normal for interest rates? Having wifi is the norm not the exception, especially for international travellers. What could be done with better data like foot traffic and analysing that data smarter using services like Google BigQuery? In the same way products and service offerings pop up when you are online, there’s no reason retail can’t replicate this by using peoples phones or number plates as recognition in the same way your username or IP address is used online now.
Collaboration. As change continues to occur rapidly, if like-minded people can be connected can they learn from each other to ‘adapt rather than resist’?