The changing world of retail
Retail has changed so dramatically since the mid-90’s. Consumerism always drives an economy and a lot has changed about the way we consume.
In the 90’s there was this thought that everything would go online and places like Ties.com thought that they would be the end all be all of the tie world and were worth a major investment. That world came to pass. BTW, Ties.com exists and I have no idea what they are worth but I am using that as a concept. Then came the next iteration where stores started to create their own online vehicles but instead of pulling inventory from their stock they bought a totally different inventory for that online site. That ended up being a bad thing. They were thinking that the online vehicle would be 20% of their business and bought accordingly.
Now we have come into a new world where the success of many online sites are starting to build out brick and mortar stores. Bonobos is a perfect example. The business began as an online site for great fitting mens pants. The brand was built and the brand grew. There is a desire from some of their consumers, more than likely in the urban pockets, to be able to walk into the stores and try on the pants or see other brands that they might begin to carry. It is all part of the experience. My guess is that Bonobos will eventually be 85% online and 15% in brick and mortar because those stores will an extension of their brand. You might find that you try on a pant there and still order it off an iPad and instead of bringing it home with you right there and then it shows up at your home later that day or the next pulling online inventory.
Look at Warby Parker, an online eye wear brand but opened up a small shop in the meat packing area. My guess is that store is pop-up but I would not be surprised to see them open up a permanent store somewhereEven Monocle, an international magazine, has opened a few brick and mortar stores across the globe as an extension of their brand.
There are also hundreds of online sites that have a certain edge, look and feel that have loyal customers. They have become someones go-to place to shop and that includes content from the site and other customers and perhaps more. I am not a fan of these sites making their money from affiliate fees but actually from figuring out the right inventory and running their online store like a brick and mortar store. Those stores will be the real winners. Building sites for other stores to benefit from your customer transaction is short term thinking and no brand loyalty.
Shopping is changing. It is interesting to watch. Retail has always continued to change as customers are always looking for something new which is why you have seen places Banana Republic change their look, feel and inventory at least 4 times over the past few decades. Retail is not easy. You have to always been thinking ahead and thinking in new ways. The idea of 85% online and 15% mortar makes total sense to me….at least in 2013.
Great piece and a passion personally and professionally of mine.Two comments:-it obviously works the other way as well. Especially in the wine biz, retail is extending online and many of the shops here in NYC are targeting as much as 1/3 of biz online, less a catalog and more just extending the customer base that walks in the door.-I’ve said it for years, that the best way to extend or build an online community or business is to be grounded at the street level. Still or maybe more true.
there is definitely something to be said about brick and mortar!
I’ve been focusing on the difference between things that get bought (think buying stuff on Amazon) and things that get sold like fashion and wine.Hard to sell online, Retail is all about it.
When I was younger, I had a Polish friend (very old-school) who told me how his grandfather bought wine (in the old country). Go to the store, open a bottle, try it, and if you like it, buy a case. Or several cases.Once I know I love a particular wine, I’ll want to have it on hand, for sure, but I think that B&M experience starts it all.
I just CAN’T bring myself to pick clothes online. I’ve got to touch and feel it. I guess I am very behind the times..
Do you have a favorite brand that you always buy the same size? Those are the clothes I buy most often online – the selection is typically much better and I prefer the convenience. Funny, B&M used to seem more convenience but online ordering has gotten so smooth, with fast delivery and easy returns, that I’d much rather have stuff waiting for me at home than deal with the stores.I think the future is heavily shifted to showrooms and online fulfillment over lots of locations holding full inventories. Also, much more made-to-order / customization, but that’s a whole other conversation 🙂
I definitely have favorite brands. Where the fulfillment takes place will be interestingMore on that later
The return of Kozmo? 🙂
.When you have particular favorites, like Bill’s Khakis or Austin jeans, it is easy because you are replacing something you already have or have voted for.I hate shopping and if I never set foot in a store again — happy me.Regards, Rohan.JLM.
I’m with Rohan for shopping for new stuff, but I’m with you on replacement items. My jeans, socks, T shirts, and most of my shoes are delivered right to my door.
,Of course, we — you, Rohan and me — are very worldly and sophisticated and able to operate on several different planes of the world of retail.This from a guy in his sweats and big warm slippers admiring the rains that have finally come to Texas..
Sophisticated is right. :)speaking of slippers … I was online ordering a new pair today. You know, since the bottom of one is almost completely detached.
Did you see the news that target is going to match amazon’s online prices in-store year-round?
Did not. Makes sense. They have to in order to compete
It’ll save purchases where people are going in-store already but don’t want to get price-gouged, but I don’t think it’ll have much impact on shifting shopping behaviors. I find the 1-click and amazon prime experience hard-to-beat.
Shifting behavior is so difficult
There was an interesting article in the Financial Times about body scanners being use by some retailers to get an accurate measurements for online shoppers. For me, fitting is still one of the biggest issue with shopping for cloth online – here is the link http://www.ft.com/intl/cms/…
the woman behind clothia.com has build that kind of system for her online shoppers as well. makes sense.
We’ve been shopping online for many years – we even order groceries online and go pick them up – and I’d say it’s more 75/25.But for some kinds of shopping it is more like 95/5. We buy almost all of our books, music, and gifts online, for example. My wife and I have to intentionally hit the streets for one day of holiday shopping every year just for an excuse to have a nice dinner and watch everyone stressing out. This year we hit one toy store to get a last minute set of Hulk Hands, then to one other store for two quick things and we were done.
I forgot about one other attempt to buy in a mortar store this holiday season. I noticed something I don’t remember noticing before, and I was wondering if anyone else has seen as extreme an example.My son had the Harry Potter box set on his Amazon.com wish list. It was ~$117. It was a last minute decision to try and get it for him, and since Amazon could not deliver on time, we tried bn.com – a couple dollars more, but couldn’t be delivered in time either.So, we hit BN at the mall. They carry it for $195 – $85+ more than on their own website. I thought that was a little extreme, but perhaps it makes sense – inventory and all.The part I thought was strange was that they didn’t have it in stock, but they said they could order it and have it delivered to the store in time – but for $195. They thought I might actually pay an additional $85+ AND make another visit to the mall. Didn’t make a lot of sense to me.
What are your thoughts on retail stores driving sales via digital outbound communication, but more personal? There are a few startups coming along in this space, PS DEPT. comes to mind, trying to help get more value out of in-store employees. Funny that you mention 85/15 for digital players too. Many brick&mortar are seeing 15% of their sales be digital right now.