#BlackFriday2018 and #CyberMonday2018 and the current state of traditional retail, have me musing about a recent in-store experience that didn’t meet a frictionless ideal for a customer first experience.
Visiting a major drug store chain, I searched for a product I know I’ve purchased there in the past – blood stoppers / quick clot bandaids. My husband is a cook with a visual impairment and cooking accidents are, while not common, a fact. Staunching the blood flow quickly and easily, these bandages have been a life saver. But alas, I could not find this product. After 15 minutes of scouring the store, I asked the staffer if they still stocked this item. After they searched some more, the answer was “no”. Later at home, I searched the drug store chain website to determine if they carried it online. Answer was “yes”. However, once online, I started to price shop. If I had to have it delivered, rather than instant gratification, then why not save money and/or speed up the delivery by sending it via my Amazon prime subscription?
After this experience my business strategist mind asked – why did this chain no longer carry this product? Why did they push me online, only to lose my business? Was their online strategy (obviously put into place specifically to counteract the Amazon competition) causing them to reduce their in-store assortment of products? J.C. Penney, for example, reported a 3.2% YoY reduction in its inventory. Yet in the same period the company aggressively boosted the product assortment for its digital channel. “In 2017, we increased our online SKU count by 50% with plans to add an additional 600,000 SKUs in 2018,” said Marvin Ellison, Chairman and CEO at J.C. Penney during a recent earnings call.
To my mind this is counterintuitive. The one advantage traditional retail stores have is the immediacy factor. Amazon has yet to figure out how to beam a product into our hands instantly. Stocking the widest array of product assortments possible in-store seems to me the only advantage traditional retailers have over Amazon –providing the “now” of an in-store transaction. Amazon purchases are still at least a day away in terms of delivery. But the products have to be in the store.
And if you are anything like me, 2018 is the year you may have noticed a more mature adoption of Amazon shopping across many product categories and many buyer demographics. I’ve been in the digital commerce world for decades and in 2018 I’ve witnessed an adoption of and loyalty to Amazon among my peers and our millennial children that indicates a critical turning point in the retail paradigm. It is so noticeable —- the percentage of discretionary consumer spending in my budget going to a single retailer — that it is starting to frighten me.
So what could the drug store chain have done differently to retain my business – even if they no longer stocked my product in-store? They could arm their clerks with a portable device that allows them to instantly look up products and determine which are stocked in store and available either in-store or online. That same gadget could be used to close my sale and swipe my credit card, right in the aisle, so I don’t wander away and start online shopping somewhere else. This would require channels to be integrated with combined inventory availability and mobile payments. No one said “frictionless” transactions are easy – but they do instill customer loyalty. Just ask Airbnb or Uber.
This year’s retail numbers may be giving the retail sector hope. Regardless of the: overbuilding, loss of mall traffic, race to the bottom discounting, and online competition, 2018 will go down as a good year for retail, the best since 2011. Retail sales in 2019 are expected to slow a bit, but still expand at least 4%. (Source: Department of Energy, Price Statistics) And online sales will cross $21.6 billion Thanksgiving weekend, or a growth of 15.5%according to Internet Retailer forecasts.
But unless traditional retail provides the in-store product assortment or bridges the gap between in-store and online selection to close the sale, they are ultimately doomed to fail.