Forget digital and brick and mortar: Think customer experience – Inside Retail

By Jason Dooris, chief executive Atomic 212 °.

Jeff Bezos caused something of a stir towards the end of July, when he briefly overtook Bill Gates as the richest man on the planet.

The ‘paper gain’ came about as shares in the company Bezos founded, Amazon, surged by one per cent, seeing the Seattle native’s estimated wealth go up to $90.6 billion, pushing him ahead of Gates’ $90 billion.

It was a relatively fleeting moment, with Amazon shares dropping later the same day for Gates to reclaim his mantle, but it was a timely reminder of the power of Amazon.

Starting out as an online book retailer, Amazon has undoubtedly changed the way we see the world of retail, and with increasing numbers of brands creating official Amazon stores, it’s tempting to see online as being the inevitable final destination for the industry.

Indeed, research firm Bespoke Investment Group have created the Death by Amazon Index, “as a way to track performance of the companies most affected by the rise of Amazon”.

But for a retailer to simply surrender to Amazon and move to a purely online presence would be folly.

While a strong online presence is a necessity these days, thinking of whether to focus on digital or brick and mortar strategies in retail is an old-school mindset.

Instead, what needs to be at the forefront of any retailer’s mind is customer experience. The key is the customer journey – across all channels.

Amazon’s brick and mortar

The April 2017 Death by Amazon indices made a note of discussing the fortunes of Best Buy, the US-based consumer electronics chain that looked for all money to be dead in the water as a result of Amazon moving into the space.

However, Bespoke noted that since CEO Hubert Joly joined the company at the end of 2012, Best Buy has recovered to the tune of some 300 per cent.

The cause for their recovery? Taking “price out of the equation”.

“Best Buy instead decided to compete for business based on service, including a highly interactive in-store experience,” Bespoke wrote. “Best Buy is a great example of how to compete in the age of Amazon.”

Indeed, it’s a lesson of which Amazon themselves took note, the online retailer having started to open their own bricks and mortar stores – imaginatively called Amazon Books.

And while there have been suggestions the stores are merely a means of flogging Amazon’s digital devices, or to get people to sign up to their Prime service, Amazon Books chief Jennifer Cast says the actual aim is actually a lot more humble.

“Most of our company loves books and so the mission of Amazon.com, the purpose was to help customers find, discover and buy books online,” Cast said

“And what we realised was that we had 20 years of data – about why customers buy, how they buy, what they read, how they read and why they’re reading it – that could make a physical bookstore just a different and better place to discover books. So that’s what we wanted to do.”

Different and better

But rather than being about bricks and mortar over digital, Amazon Books merges the two.

Books are put on display in a fashion that takes advantage of the way they’ve been rated online, and you can choose to buy your book in-store and walk out the door with it, or have it delivered as you would if purchasing online.

No, it’s not mind-blowing innovation, but big changes come from small steps.

And combining these channels puts a very futuristic means of shopping tantalisingly within our grasp.

Picture this – you’re researching a purchase on your smartphone while walking in the city. You walk into a store which knows what you have been researching on your phone, and through digital beacon technology, the store feeds shopping suggestions to you and directs you to the areas within the store to find what you’re looking for.

Having found the product you want to buy, you scan it with your smartphone to make a purchase, which is then delivered to your front door within the hour.

There’s literally not a single step in that ‘future’ scenario that isn’t possible at this very moment.

In fact, aspects of it are already at play in Italy.

Supermarket of the future

Opening in Milan in December 2016, Coop Italia’s Supermarket of the Future was created aiming to “reinvent the customer experience in grocery shopping”.

The store is fitted with Microsoft Kinect, allowing customers to hold products up to the sensors, which then display the “origins, nutritional facts, the presence of allergens, waste disposal instructions, correlated products and promotions” of products.

Vertical shelves help customers to find products that are more likely to be related, while screens throughout the store show cooking suggestions and daily promotions.

Are you noticing the pattern? Digital innovation is well and good, but unless it’s being used to enhance the customer experience, what’s the point?

What about pure digital?

There are, of course, a number of businesses that have made their money purely in the e-commerce space, but if you think you’re going to do that simply by saving money on renting a shop front, you’ve got another thought coming.

Bezos famously warned the market years ago that “Your margin is my opportunity” – trying to match Amazon purely on price won’t end well for you. You’ve got to do something different.

And the easiest thing to do differently is the thing successful people have been doing well for millennia – offering good service.

As Amazon themselves are showing us by setting up their own stores, there’s much to be learnt from the lessons of old, and it’s not like e-commerce solved a problem – sure, most of us would rather not have to face the supermarket on a Sunday night, but plenty of people love going to the shops.

What Amazon did is the same thing so many digital disruptors have done since: force lazy, rude or unfairly expensive businesses to pull up their socks.

Ultimately, there is no single solution in the face of Bezos’ retail machine – what works for one business won’t work for another.

The key is customer experience.