Categoría: Doug Stephens

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The Future of The Retail Store, via Doug Stephens

Escrito por // Editor-in-Chief



Retail is dead!

At least, that’s how Marc Andreessen sees it.  The entrepreneur and tech investor was recently quoted saying that all physical retail stores will die, succumbing eventually to the vast sea of online competition.  According to Andreessen, there will be one way to shop for everything and that way will be e-commerce.  It’s also fair to say, given that Andreessen co-founded Netscape and is invested in a number of online properties, that he might be just a little predisposed to this extreme position.  Nonetheless, his opinion caused some unrest in the retail community and should be taken seriously.

On the other hand…

I have been a vocal proponent of a somewhat different future; one that includes both virtual and physical stores.  You see, if I believed that humans shopped for no other reason than to acquire goods, I might be more aligned with Andreessen’s view but in fact, we don’t shop just to get stuff  -  any more than we go to restaurants purely for nutrition.  In fact, we often shop to fulfill other deeper needs as well – the need to disconnect, to socialize and to commune – and at times to simply be out in public. Why else would celebrities brave the hoards of paparazzi to shop for things they could undoubtedly have delivered to them on a silver platter?  The physical, human experience of shopping is in some ways of far greater value than the goods that come along for the ride.  So, while shopping is a means of acquiring the things we want and need, it’s also a meaningful social activity that appeals to our deepest, human tendency to gather in tribes.

That said, I’m convinced that between the futures that Andreessen and I describe, lies the truth.  But one thing is quite certain; that retail stores will be much different in the years to come than they are today.

But how different?

Regrettably, this is where the debate usually ends, with one side declaring brick and mortar retail dead and the other passionately defending its infinite existence.  Rarely do we hear either side attempt to describe the specific ways in which stores are likely to evolve from what we see today.  In other words, few seem willing to paint a picture the store of the near future.

So, I’ll take a shot at it, based not on what I foresee twenty years from now but rather based on what I see just around the corner and in front of me today.

And so…

These are some of the biggest changes I see to the concept of the retail “store”.

Less Take and More Make

Stores will increasingly become places that we visit, not simply to pick up mass produced articles but also to design and co-create special things with the personal assistance of experts.  Whether it’s customizing a suit, building a one-of-a-kind notebook computer or designing the perfect bicycle, stores will be the point of collaboration and customization.  These elements of customization will make for unique personal and physical experiences.

Less Product and More Production

With online players like Amazon prepared to ship just about anything we want in a matter of a day or two, our dependency on physical stores for mere distribution will continue to wane rapidly.  Smart brands will have no choice but to, focus increasing amounts of attention on making their store spaces experiential brand starting points, with high production value. Stages where magic happens.  Canadian sporting goods retailer Sport Check recently unveiled a concept store that might better be described as an adult amusement park for the sports enthusiast. Leveraging a variety of media and technology, the store has morphed into a wall-to-wall sporting experience.  The store remains the most visceral expression of the brand essence.

Less Conversion but More Converts

The purpose of retail will no longer be to solely convert every customer into a buyer of goods but rather transform them into disciples of the brand itself.  To begin a relationship – a dialogue that may play out in any number of buying channels; online, in-store, mobile or elsewhere.  It doesn’t matter where purchases take place. What matters is that the consumer falls in LOVE with the brand and shares that love with others.  The store maintains the potential to be that emotional center of gravity for the brand.

Less People but More Performance

The economics of online competition mean that brick and mortar discount merchants will have no alternative but to completely automate their store environments to remain cost-competitive – Walmart , for one, is already heading in this direction.   At high-end merchants, stock clerks, cashiers and inventory counters will be the similarly replaced with technology. Front line salespeople, however, will be higher performing professionals who are paid considerably more money than today, and will be expected to literally sweep customers off their feet! These rare individuals will be intense believers in the brand, super-users of its products and co-creators with their customers. The era of the minimum wage clerk is giving way to the simultaneous rise of the robot at the low end and the Brand Ambassador at the high end.

Less Interruption and More Exchange

The current practice among retailers of asking for personal information only to annoy and interrupt with meaningless offers will give way as consumers garner more tools to filter out these useless overtures.  Enlightened retailers, like Neiman Marcus,  will appeal to their customers for a more overt exchange of value promising distinctly better, more customized and enjoyable experiences in exchange for relevant personal information.  The transition is less about privacy and data and more about earned trust through performance.  And the fruits of these data inputs will be almost immediately tangible to customers through clearly personalized services and product offerings, as data latency quickly becomes a thing of the past.

Less Established and More Ephemeral

Consumers, particularly younger consumers are developing an insatiable appetite for what’s new and next.  Therefore, managing the same 100 stores in a mall for years on end simply won’t do anymore. Leases will shorten, new retail brands will evolve more quickly, old ones will die sooner and pop-up installations will rotate through the space. Change will be continual.  The mall manager’s role will become that of editor and curator as the mall becomes a revolving door for new brands and concepts, in a relentless effort to captivate consumers.

Less Average and (Much) More Remarkable

In a contracting market, there will be increasingly little room for sameness.  Ten retailers at the mall selling variations of the same clothing styles will soon become 5 retailers who absolutely kill it, with unique and remarkable collections.   Average, forgettable experiences simply won’t pay the rent anymore and will be kicked to the curb by outstanding stores who bring something new and fascinating to the market.

So, is retail dead?  Not a chance. If anything, it’s the very pervasiveness of online alternatives that is causing the best stores to rise out of the ashes of 30 years of mediocrity, ushering in what I, for one, believe will be the true Golden Age of the Store.

(Via Retail Prophet)


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The Next Consumer Revolution: iTunes for Products, by Doug Stephens

Escrito por // Editor-in-Chief


In 2003, while the music industry was threatening and suing over digital downloading and file sharing, Apple quietly launched iTunes and forever revolutionized the way we consume music.  Today the idea of buying 10 songs on a disc, only to get the one song you really like seems almost ridiculous.  One short decade later, iTunes represents 29% of all music sold at retail (both digital and physical).  Meanwhile, record stores like HMV are sinking into bankruptcy.3-D

Now, another consumer revolution is waiting at the gates. And it’s the revolution of  3-D printing  The question is, who will own this moment in history?  Who will lead this revolution and just as important, who will die trying to suppress it?

Only a few years ago, 3-D printers were far too expensive for the consumer market, but now it’s possible to buy one for under $2,000. Given the growing ease and affordability of this technology, it seems completely reasonable to expect that within the next decade, we (consumers) will routinely produce a percentage of the items that we need on a weekly basis, from the comfort of our homes. It will be commonplace to download 3-D product designs and print them locally, including toys, household items, art, decorative items, equipment, parts and hundreds of other common products.

Some analysts have argued that the problem with this imagined future lies in the high cost of the process and in particular the feed stock material used in it.  A common item, say a plate, for example, would be on the order of 30 times more expensive to print than it would be to buy in a store.  On the other hand, 3-D printer manufacturer MakerBot has offered examples of being able to print small items, like an iPhone case for example, that might cost upwards of $20.00 in a store, for only a few cents. We can also logically assume a steady drop in the cost of both 3-D printers and feed stock material as the technology is more widely adopted and as competition in the category grows.

So, consider the math from a retailer’s point of view.  One item purchased and scanned could potentially end up being shared to hundreds or even thousands of consumers who then simply print an identical replica for which the retailer and manufacturer receive nothing. The economic impact on the brands that design and make such items could be staggering. Indeed 3-D printing has the potential to be a consumer revolution that will make the disruption caused by music sharing look like a walk in the park!

Which leads me to the question, how is the industry likely to react?  In what will seem like deja vu, I fully expect manufacturers and retailers alike to terrorize consumers and to litigate the hell out of them.  They will fight tooth and nail to protect the status quo – that being that manufacturers do the making, retailers handle the selling and consumers… well, consumers simply buy what’s made available to them.  Brands will struggle in vain to defend their existing wholesale and retail business models. And they’ll fail to see that the horses are already out of the barn.  There will be no going back once consumers have been empowered to produce what they want, when they want it.

But like Steve Jobs, my guess is that someone (perhaps Apple or Amazon) will emerge who recognizes the true opportunity that lies ahead.  The opportunity to aggregate, curate and sell individual product designs at reasonable prices to consumers, who can simply and legally download them for in-home production.  Like iTunes, they’ll envision a digital marketplace made up of tens of thousands of products across a multitude of categories. In other words, they won’t resist the trend, they’ll enable it and grow it.

And just like record labels and iTunes, brands and manufacturers will have the option of either playing along for a percentage of the action or continuing to fight over 100 percent of nothing.  They’ll have little choice but to evolve their business model beyond simply selling finished products to retailers and begin licensing their product designs to consumers as well.  And yes, it will completely and permanently alter their revenue streams.

There’s no escaping the emerging reality that we are entering a new era where the customer is no longer merely a consumer but a manufacturer in their own right.

Look for my book, The Retail Revival coming February 28, 2013

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(Via Retail Prophet)