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Retail without boundaries: The future store is your home

  • Posted on January 9, 2020
  • Estimated reading time 3 minutes
Retail without boundaries The future store is your home

Imagine this: You wake up, head over to your “magic” mirror. In the upper right, you see an image of raindrops with “60%” next to it. Focusing on the main part of the mirror, you scroll through your favorite outfits – recorded and tagged in previous sessions. You mix and match a couple of pieces, but when you have them on, you’re not so sure they go well together so you connect with the on-demand stylist. She can see what you’re wearing, and she says she likes the look. She scrolls through your favorites, looking for the final touches. After finding a belt that will look great, she glances at the rainy forecast and realizes that you don’t have any weatherproof shoes. She shows you a potential new pair, displaying them on your feet in the mirror; they’ll go with this outfit and you like the brand so you order them and log off. By the time you’ve finished your breakfast, a drone has delivered your new boots. You step in them and head out to work.

This future isn’t so far off. But before we talk about what a store can be, let’s talk about what a store is. At its heart, a store is a place where people exchange value (often money) for goods. Historically, all those elements had to come together in the same geographical location. Now, thanks to technology, goods can be paid for and delivered anywhere. We don’t GO shopping; we’re always shopping. 

We’re able to purchase anywhere in large part because payment, otherwise known as exchanging value for goods, is now most often accomplished digitally over remote servers rather than physically handing over currency. Amazon Go’s walk-in walk-out stores; peer-to-peer services like Venmo and PayPal; Apple Pay for groceries or bill pay - payment is truly boundaryless. 

Sears Roebuck paved the way for home delivery of goods, but Amazon, Walmart and other retailers hypercharged that capability. Sites like eBay and Farfetch connect buyers directly with sellers around the world, while drones and other autonomous vehicles are removing issues with last-mile delivery. These improvements in logistics are breaking through the physical constraints of getting things to us.
But it’s the last element that is the most crucial – the people. Specifically, stores traditionally have an employee, or expert, who can interact with the customer to answer questions and complete the transaction. And we’re now starting to see how technology is bringing these two people together away from the traditional “store.” Notably, Mirror is a startup offering a smart mirror that also delivers instructor-led fitness classes, while Enjoy helps customers navigate technology purchases by bringing the tech to the home, and then helping customers with install and setup. Instagram influencers inspire followers to shop and purchase directly from their social media feed, wherever they may be.

And this is just the start. With the elements of a store broken into its constituent parts, it’s easy to see a full range of shopping capabilities taking place without a customer ever leaving their house. For commodities and replenishment purchases, smart speakers offer a fast and easy way to reorder. “Magic mirrors” connected to evangelists or experts support more complicated transactions, especially when fit or style are a concern. Video conferencing and extended reality offer the opportunity to receive on-the-spot support when something needs repair or maintenance. Houzz and IKEA already offer extensive try-before-you-buy features using augmented reality in their apps – there are even virtual extended reality shopping platforms for wholly immersive experiences.

Retailers and brands can start building the foundation for their place in this future by building back of house technology that leverages what machines are best at – inventory, logistics, payment, etc. Simultaneously they should also build out front of house systems which combine technology, potentially new business models, and processes to facilitate communication between employee experts and the customer. 

Stepping into a customer’s home means stepping into their life in a new way – consider how Best Buy’s Geek Squad is now becoming the CTO for the home. Humans are still better than machines at understanding and providing context; build a space for your employees to create the kind of personal experience that draws a genuine emotional response from your customer and give them the technology to deliver on that customer’s needs. Bringing the store and its employees to the community, rather than trying to force the community into the store, creates tightly interwoven relationships and happy lifetime customers.

One note: a physical store still provides plenty of opportunity for revenue and growth (just ask born-online brands like Warby Parker and Glossier). Having a dedicated space means retailers can offer social events and experiences or allow for the serendipity of discovery – things that are still hard to deliver online.

Lastly, another key trend for retail is the circular economy, where existing products are brought back into the product development cycle to be recreated and sold anew. From a retailer/brand perspective, Eileen Fisher led the charge with Green Eileen, and brands like Ted Baker and LEGO are following in their footsteps. On the consumer side, consignment sites like ThredUp and The RealReal offer end consumers a chance to benefit. In-home retail provides the opportunity to close the gap between the two – imagine a technician who comes to install your new TV, then takes your old set for resale and issues you an immediate credit. 

Retail is a tricky business, but by looking ahead and finding ways to use technology to bring all the elements of a store to the customer, wherever they are, you can turn potentially disruptive technology into a catalyst that enhances what you already offer and propels you into the future.

Click on over to learn what Avanade has in store at NRF 2020.


 

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