Want to have some fun? Mention to a marketer or retailer that shopping is changing and in the future we likely won't shop in stores and you'll get a huge variety of impassioned responses (many of which include that you're nuts). It's like to story of the blind men and the elephant, one's perception of retail is heavily shaped by the part they can feel, not the entire entity. Many retail industry professionals I speak with say that people will never buy certain categories fresh food from ecommerce. I find that overwhelmingly these folks are from smaller cities and towns where fresh food delivery has not already been ubiquitous for years. Same with many other categories ranging from furniture to clothing and even everyday household goods, if you aren't experiencing it, the threat may seem non-existent or far removed. Yet, every single day, the new reality of retail is getting closer. There is a collective 'duh' moment for many shoppers that suddenly realize just how much time and energy (and expense) is consumed by physical shopping. Traditional retail competitive hierarchies like price, location, discounts and huge product selections are becoming secondary factors for consumers seeking more time in their day and ultimately ease of use. Simple is becoming the primary driver for many shopper's retail decision tree.
There are several interacting forces that are driving retail change and the combined impact is overwhelming. The first is that modern retailers are platforms, not channels. Amazon is a MEDIA company that sells stuff. Traditional retailers are having a hard time adapting because they are still too focused on protecting their original channels. It seems every retailer is talking about omnichannel but few really deliver on the idea that products will now come to people vs. people coming to products.
Products will now come to people vs. people coming to products.
Enabling this trend is a host of technology ranging from self-driving cars to voice assistants to drones, there are almost unlimited solves to the last mile problem. The final force is shopper behavior and no amount of marketing and promotions is going to change the fact that a collective awakening is going on that physical shopping for the most part sucks. Not because it's a terrible experience, which in many cases it is, but people simply have things to do with their time. Once a shopper orders their toothpaste from Alexa, its over for stores.
Great Retailers and Brands Are Removing Friction
My boss at Walmart, Clint McClain, told me to go find friction in the shopper's journey and remove it. It is quite simply the holy grail of retail. Nespresso can keep me supplied with great coffee to brew at home without me ever having to lift a finger and even effortlessly recycle its aluminum pods for free so I get a higher level Maslow out of the experience. I pay more per cup than a Keurig but drink significantly less hyper-expensive Starbucks because the quality is at parity and I don't have to go get it! Nespresso even has machines that will auto-order for me so that I literally don't have to do anything at all! This is the kind of frictionless shopper experience that every brand and retailer that sells a product should be aggressively studying, experimenting with and implementing. New entrants like Brandless are taking a step towards simplicity by removing brands all together and selling all CPG items for $3, what it calls 'removing the brand tax'. Shoppers will reward retailers that help them simplify what is a mundane and repetitive task with their loyalty and in many cases set it and forget it with replenishment.
Video Source: Melissa and Alex Family Vlogs
Alexa, bring me a pizza (or a hamburger or a lobster dinner), you get the idea, future shopping will be done with no more than our voices and in many cases, completely automated. My Waze already reads my email and reminds me of travel times for meeting and events and is at the ready when I leave my garage, seamlessly moving into guidance mode as I shift into drive. Waze could easily have dinner waiting for me just as I arrive home. Also, if you think that shoppers are going to spend time and energy chasing discounts, deals and offers across channels and jump through hoops for loyalty programs I believe you'll be very disappointed. Most shoppers, ones that you can make money from at least, are not going to trade saving time for investing time again in playing retail games. Sam Walton sought to remove gimmicks and just give his customers the lowest price and they helped build Walmart into the largest retailer in the world. As Kissmetrics Blog points out discounts = desperation.
Simplicity is the new everyday low price (EDLP)
The Paradox of choice is real and digital will bring that home in ways most current consumers have never seen. Voice ordering from Alexa presents a shelf of two items, TWO! After that Alexa says you know what, just go visit the app and do it yourself! Choice and product selection in the CPG world went through the roof as retail shelf space mushroomed. Walk in the Shampoo aisle and your brain will be immediately overwhelmed. When P&G cut Head and Shoulders choices from 26 to 15, sales went up 10% according to a fabulous Ted talk by Psycho-economist, Sheena Iyengar. Explosive growth of automated and programmatic shopping will put additional pressure on this effect. Shopper systems will use predictive data to make brand choices for consumers further removing them from the process. To put it another way, my ecommerce channel platform will make my life easier by stocking the goods I need automatically. As trust grows in these systems, adoption will skyrocket.
Location, location, location, the strategy of place used to be critical for retail. Perhaps now the new rule is simplicity, simplicity, simplicity.