The news of the delayed Amazon Go public launch probably has retail tech executives all over the country exhaling a collective sigh of relief. I imagine the conversations around the proverbial water coolers are full of “I told you so” and “Of course it didn’t work,” or “it’s harder than it sounds, isn’t it?” But to think that this is the end of the Amazon Go conversation would be both foolhardy and shortsighted. From where I sit, there is no doubt that in Amazon’s case, they will work out the kinks and continue to disrupt retail in the way they have been for 20 years.
The news of the delay is actually quite disappointing to me. As the Head of Marketing and Customer Experience at RetailNext, you might think that I would be thrilled – it gives our customers more time to evolve their in-store landscapes, it gives our engineers more time to even further develop RetailNext’s groundbreaking capabilities, it gives shoppers one less reason to go to Amazon, etc. But the truth is, as I talked about in Amazon Go – Time to Panic?, without innovation, retailers will continue to muddle along with the defeatist mindset that has been plaguing our industry for the past several years.
There are few surprises in today’s retail environment. There are still too many stores, the stores still look the same as they did 20+ years ago when Amazon burst onto the scene, and shoppers are still well ahead of retailers in how they think about shopping. So what should legacy retailers do? Some advice follows.
1. Rationalize the space, reinvent the experience. In many cases, retailers should be closing stores. Fast. It’s well documented that the US has more square feet of retail space per capita than anywhere else in the world, by a long-shot. And the truth is, we just don’t need that much selling space. But what we do need is a reimagined experience. It is no wonder Sears is in the trouble it is in. Walk into one of their stores and it’s immediately clear why. There has been no investment in the stores and they look like it, there has been no investment in product as evidenced by the lack of assortment in-store and they have whittled down staffing beyond even basic coverage. Why wouldn’t you go to Amazon or, quite frankly, anywhere else? What Sears has done is built a good marketing and offers engine, but from where many of us sit, it’s not enough.
2. Don’t forget the importance of product. One of the key reasons people cite for visiting physical stores is the ability to touch and feel a product before they buy. This is great and easily understood, but what if you get her into the store and she’s not inspired to experience what you are offering? Or better yet, what if she comes in knowing what she wants and leaves with that item and more because you were able to offer her something unexpected, or delightful, or simply convenient? Following the great recession, retailers have been so reluctant to take product risk that it’s become really hard to differentiate between retailers – especially in the fashion retail sector. This has given innovators like Zara and H&M an opportunity to strengthen in the market, and recovery has been hard for the others.
3. Use technology as an ally, but understand its limitations. The retail technology landscape is littered with companies making interesting promises about how their technology can revolutionize how you think about shoppers. But some fundamental considerations about the technologies themselves cannot be short-cut. For example, in the in-store analytics space, there are two fundamentals that bookend the data you can collect in-store: 1) If you want precision measurement, you almost always need video, 2) if you want to know something about the shopper herself, she has to give you permission. Between these two absolutes, there are many nuances, limitations, caveats and permissions that drive what can and cannot be done. The limits to the kinds of data you can collect and use for shopper experience are almost endless, but you cannot be fooled by a vision of the future. Some capabilities just don’t exist today (for example, being able to accurately count entrance traffic with Wi-Fi).
In the end, only time will tell how the Amazon Go story plays out. But in the meantime, I beg retailers to take the threat seriously. Amazon will continue to innovate, they will pay hyper-focused attention on the shopper and they will disrupt the physical store landscape possibly in ways that are greater than (and faster than) what we’ve seen with their online business.
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What Every Retailer Must Know About Traffic 2.0
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