Tuesday, 13 March 2007

Integrating Online with Bricks & Mortar Retailing

It is now 4 years since I completed a dissertation on the impact of online retailing on the high street and the debate of its influence is still raging. Last month Future Laboratory - a trend forecasting group based in London - stated the advent of Web 2.0, wireless broadband and developments within mobile technology are significantly changing the format of traditional retailing.

In the report, the idea of immersive retailing is discussed and Future Publishing predict stores may lose their share in the online market if they do not successfully integrate their digital presence with offline outlets.

When completing my dissertation there was the worry amongst some trend predictors that online retailing could eventually remove the need for the high street. Although there is some possibility I think it highly unlikely. The evidence for integration and the introduction of the shop-as-gallery approach seemed far more probable then and continues to be a major factor today.

The ability to browse goods in a gallery type store and then purchase them online once back home or using pods instore that allow the consumer to buy goods from the web seems to be ever increasing. An article from as far back as July 2005 details how Gordon Group Holdings has developed the idea of Epicentre - an instore method of ordering online.

The introduction of RfId is also introducing a whole new world to the retail market. Not only does it provide stock replenishment advances but also introduce the idea of barcode scanning from mobile devices that could charge the consumer for the goods scanned, bring up more information online about the product (e.g. colours and sizes available, other relevant products etc)and begin the shipping process to the consumers registered home address. This is just another technological step in the store-as-gallery approach.

Technology is providing retailers with another method of selling online but it is the stores pushing the boundaries of technology that will continue to be at the forefront of the retail market for years to come.

Retail Solutions 2007
Future Store
Amazon's Bezos on the future of retailing


Christopher Cooke said...

Chris Anderson in "The Long Tail"
makes the point that the biggest advantage online stores have over bricks and mortar stores is the ability to slice and dice your stock on an ad-hoc basis. Bricks and mortar stores use strict taxonomies because that is what appeals to the lowest common denominator and ultimately sells more. Consider the choices a store owner has to make on where to put a blue anorak. Does this go in Mens Wear, Womens Wear, Sports clothing, outdoor clothing... etc In the online world you can list this item in all of them. In fact there is no disadvantage to listing it in as many different ways as possible; the nylon section, the blue section...etc there is no extra cost to listing items in this way.
While I think integration is the key I think the possibilities extend well beyond that of an online store on a screen in the store al la North Face. You still need to satisfy the the needs of the bricks and mortar shopper. These are that they like to touch, feel, try stuff on, buy and take home on the spot. The question is "How can you satisfy these needs and still add the extra value you get in the online world?"

I believe the answer lies in vending machines. Very much like the vending machines you would buy a Mars bar or Coke from but lets augment it a little. Lets remove all the items from the machine. Lets have an interactive display on the front which acts as an online store and finally lets remove the glass front. So what do you have? A pretty useless machine. Until you hook it all together with the warehouse backend. So you use the display to browse for your items - hit show me the results. The bins in front of you are filled up with the results using some robotics creating a truly dynamic vending machine with all the advantages of bricks and mortar shopping and the ability to slice and dice stock as you wish.

nypo said...

I think the idea of the vending machine sounds very interesting. I think ideas around interactive displays are quite interesting as well. Porshe, for example, are starting to use interactive displays in their store windows where consumers can scan barcodes into their phones and receive information even when the store is closed. There is also the area of Second Life and virtual stores that has cropped up over the last few years that seem to be showing ever increasing potential. Maybe there is some way this could be integrated into real world stores - don;t know. Just a thought.

Second Life Article