Ever since e-commerce arrived on the scene with a deafening thud in the 1990s, the retail landscape has never been the same. In that short time we’ve seen decades-old brands disappear forever, and malls and department stores slowly fade away. Perhaps slightly pessimistically, it’s even been predicted that the retail store would disappear altogether by the middle of the next decade. But brands aren’t going out without a fight, and are taking stores a giant leap forward, truly bridging the gap between online and in-store shopping.
It was, of course, big news when Amazon opened its first physical Amazon Go location, an 1,800 square-foot shop earlier this year in Seattle. Not only is the biggest e-commerce foe on the planet moving into physical space, it did so with the innovation allowing customers to simply pick up items and walk out, once they engage their Amazon smartphone app. Chinese e-commerce giant Alibaba is also taking its operation physical, debuting in July its concept store, FashionAI, which will be a high-tech wonder. According to Forbes, FashionAI will incorporate “smart mirror technology with RFID, machine learning and computer vision to bring mix-and-match styling options to its consumers anywhere they shop.
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Physical retailers are battling back, and introducing some innovative concepts of their own that represent a total transformation in the brick-and-mortar retail experience. Far beyond simply cashier-less shopping, the ideas being introduced combine the convenience and informational aspects people love about e-commerce with the difficult-to-replicate human touch offered by physical stores.
Nike opened its Nike by Melrose store in Los Angeles earlier this month, and the experience they’ve created is nothing short of futuristic. Forbes reports the store will carry city-specific product, which will be stocked and rotated using data analysis, down to the colors trending at the location at any given time.
The NikePlus app, which connects customers to the store, also connects the store to the customers. Shoppers can reserve items, arrange a smart locker or curbside pickup, or see real-time stock availability right from the app. In exchange, Nike collects customer data, which it then uses to further augment and improve the experience. NikePlus members even get rewards for loyalty with a members-only vending machine, the NikePlus Unlock Box, which when scanned, gives repeat customers products or other bonuses. Once shoppers enter the store with the NikePlus app engaged, they will, using geofence technology, be automatically recognized by the store. That could enable the store, for example, to set aside items that person might like in their exact size before they even ask for them.
How Physical Space Gets Used Is Changing Rapidly
Other similar concepts have cropped up among numerous other brands, and some startups have even come into existence as an innovation in and of themselves. Starbucks of course has been a trailblazer in order-ahead and mobile ordering technology. Online clothing retailer Bonobos has opened Guideshops that don’t carry any inventory, but serve as a place customers can try on clothing before they buy them, aided by a personal stylist, of course, and place their order in-store directly with the store’s website. In the food space, Zume is an automated mobile restaurant that prepares and cooks your pizza to order while it drives to your location.
At this point in the game, where there have already been casualties like Sports Authority, Borders and Circuit City, the time for playing it safe is over. Retailers must strongly consider what innovations they will deploy to transform the experience of shopping into one that feels fresh, rewarding and memorable.
Retail transformations happen cyclically, from the advent of the department store and catalogues to the shopping mall to e-commerce. There hasn’t been a 20-year period without a seismic shift in the retail world in many decades. We’re due for the next wave, and the personalized physical space looks poised to be an early contender.