By Scott Doniger, Executive Director, Strategy and Planning, [wire] stone
Retailers are reeling. Prolonged recession, a shrinking middle class, global competition, Groupon, LivingSocial, Amazon Prime, “every-when” enabled consumers, smart phones and smarter devices, sensing technologies, cloud-based gaming, virtual clothes-changing programs, 3D showrooms, social commerce and gaming, Level-Up, Foursquare, Etsy, Gilt, Pinterest, NFC and mobile wallets, digital coupons, device-enabled sales staff, LiveChat customer service…the list grows every week. Optimists see opportunity. Most see trouble.
Has e-commerce already dis-intermediated the physical store, like online has in newsprint? Some are right to think so. There is growing evidence that digital channel commerce just might displace brick and mortar. Among others, here’s a recent study validating that the motivation to shop in-store is decreasing:
“Digital usage and ecommerce increase when women become moms. Two recent studies show that women spend less time with media outlets such as TV and magazines—but more time online—during pregnancy and after becoming a mom. An Eric Mower and Associates survey, for example, found that more than half of new mothers spend less time watching TV (59%) and reading magazines (55%), and that 59% spent less time shopping in stores as a result.”
Sure, new moms will actually shop more and will be less inclined to go to stores. But do retailers want to make the risky assumption that this data is not a harbinger of a major fault line trend that confirms the question “if the experience shopping offline continues to get better, will people ever really need to shop in-store?”. We think this risk isn’t worth taking.
Brick and mortar sure seems broken – see Blockbuster, Borders, Kmart, Comp USA — who’s next to file chapter 11? But we are bullish on brick and mortar because our vision of the in-store future (unfolding on a few beachheads already) is that, done right, digital in-store is a game-changer. Retailers who don’t sprint to their own digital future will soon realize it’s game over if they don’t.
If the pace of chaotic, rampant disruption is roaring ahead, can retailers run fast enough? They can – IF they go “all-in digital”. We urge retailers to completely re-think how customers use digital devices to connect, share, and buy today – and how they’ll do so in the future. We propose that winning retailers will create their own scalable, sustainable, personalized, and digitally enabled path-to-purchase models, engagement platforms, and technical infrastructures, all driven by evidence-based learning specific to their domain. Here’s a short list of guiding principles as we see them today retailers of all types should embrace to go “all-in digital”: