At the core of human behaviour is the need to connect. We are pack animals. The sum of our parts is greater than any one individual…agree? Ok, read on.
There are those who have a dystopian view of the future, one where we live alone, and sit alone, staring into and interacting with screens. Ordering what we want, when we want it, and CLICK – a scheduled delivery arrives at our door. As much as I love the works of George Orwell, I simply don’t see dystopia happening at a large scale anytime soon…
Is this our future? I don’t think so.
Consider the story of milk. Milk was the single most delivered item to your home in the UK in the mid-late 1900’s. Ernie, the fastest milkman in the West (Benny Hill in case you don’t know the reference!) and his peers, driving an electric vehicle no-less, ensured that between 4 and 6am you had an ice-cold pint on your doorstep. They even expanded into adjacent products, orange juice, bread, crumpets – all items based around a lovely family breakfast.
So why does this industry no longer exist? A seismic shift in distribution that’s why. By cutting out the middle man, the wholesalers or even the farm could sell direct to the supermarket, at prices much, much lower than the multi-layered margins demanded by a delivered pint. Couple that with a shift from expensive glass to high density polyethylene (HDPE) materials, meant that you could still store milk safely and securely, and procure it much cheaper than you could from the independent broker – Ernie.
So, if an item, delivered to your door can REVERSE the dystopian model that everyone is dreading, what does this mean then, for retail, and telco right now?
Distribution is the driving force behind the changes. Omni-channel is dead.
There is no such thing as a channel now, certainly not to the consumer, who wants a ubiquity of choice, and wants it on their terms. So, businesses still thinking in a siloed way of – “lets make our ecommerce business better”, or “let’s think about our stores”, and “let us sell direct to consumer on their devices” – they are missing the point.
However, does this mean that retail does not have a place?
No. Retail will ALWAYS have a place for the reasons I mentioned above, that human behaviour is designed to be together, not apart.
What this means is that retail and our time spent together is changing. In 2017 it is expected that a plethora of restaurants and other entertainment choices will be fixtures in shopping malls. It is expected that large format stores can and should provide a WOW experience, however small format stores are niche and comfortable and efficient.
The USA is closing stores as they grew too fast and too far. They got greedy. The rest of the world may be tweaking their store estates, but name me a decade in the last century where that hasn’t happened?
Some industries are more affected than others – banks being one that has been really hurt by digitalisation. However, the bounce back in that industry is around making new stores with new experiences built around financial advice, and co-exploration of products and services. Banks who have leveraged this strategy are opening new branches this year.
Telecoms companies that grew too fast and got greedy in the face of 20 years of consecutive growth are realising that they need to trim their estates to provide different formats, and varying experiences depending on where they are and who they are talking to. One operator boldly claimed they wanted ZERO stores by 2020 as all transactions would be done on smart devices and by self-service kiosks! However, they said that as a tongue-in-cheek publicity statement.
In reality they are trimming their estate and adopting a digital strategy, but don’t for a second think that ZERO STORES will happen! That really would be dystopia for a Telco as their long-avoided road towards being the ‘dumb pipe’ like a utility company would really come true if they didn’t have a device experience in some way with their end users! The IOT and 5G will see Telco store estates expand again – mark my words!
What is crucial in retail are the NEW EXPERIENCES.
Lego – the AR “out of the box” selector, the fact that children are encouraged to come in and PLAY – wow, imagine that 20 years ago!
Clarks Shoes – Using a configured iPad as a foot sensor linked to the types and sizes of shoes you are considering, which ones really will be the most comfortable?
Verizon – upload your pictures and 3D print a personalised phone case for your new phone.
Ralph Lauren – connected smart mirrors in changing rooms let you see just what the ‘other’ colour will look like and can assist you in calling staff to bring extra (recommended) product to try on.
I could go on.
The fact remains that retailers need to stop thinking about Omni-Channel and embrace the UbiChannel ethos that puts the customer in the centre: Pay in-store, deliver to home. Experience in store – start the transaction, finish it at home – collect it next day.
Once we understand that experiences are what is driving today’s shopping behaviour, be those in-store, on your web or via a 3rd party re-seller, digital or phygital – it does not matter.
The fact that we can get our milk delivered (if we want) or pick it up ourselves (if we want) or pop into a location that will have a milk tasting bar before we decide which variety and flavour to buy (if we want) is the REAL story here, it’s not omni-channel – it’s UBICHANNEL!
Contact us if you’d like to know more about how the best retailers use tech to enable UbiChannel – and how to get started with 100% real-time, visible inventory in all your supply chain locations.