The future of retail
The evolution of retail will feature a blend of online and offline shopping experiences. Yet physical stores will continut to be important. Amazon Go, a cashier-less store, combines the efficiency of online shopping with the tangible experience of brick-and-mortar stores.
This article was first published in The Mint. You can read the original at this link.
We have witnessed huge changes in the retail industry over the past few years. Thanks to e-commerce, we’ve become comfortable with the idea of not having to go to a physical store to shop. We have learned to factor delivery times into our shopping schedules, knowing that impulse purchases are going to take a week to arrive at our doorstep—and that last-minute shopping is no longer a viable option. We have learned to trust the algorithms to suggest things we might like based on our past purchases. For inveterate shoppers, this has become the new avatar of window shopping.
As the category of items available for purchase online has expanded, everything from groceries to garments are available at the touch of a button. For whatever is left—those last remaining items which are, for some reason, not yet in the online storefronts—there are delivery services that will go to the stores to collect them. We truly have no reason to get out of our armchairs any more.
And yet, there is something about shopping in a store that the internet simply cannot replicate. Being physically in the presence of the products allows us to come to different conclusions about them, our ability to physically interact with them allowing us to better visualize the context in which they will be used.
Which is why, no matter how convenient it might be to have groceries delivered to our doorstep, there is nothing that can replace that special comfort of being able to visit a grocery store and actually pick your vegetables from those on display.
This is what has always been missing with online retail—a weakness in the model that can never be fully substituted by the assurance of free return shipping and a full refund.
No matter how frictionless the online shopping experience might become, the inability to actually eyeball the products before you buy them, seeing them on the shelf with others like them, and being able to pick and choose those that you need, is the frontier that online shopping seems destined to forever be unable to cross. This is why, despite the incredible growth in online shopping, brick-and-mortar stores are still around.
Earlier this month, Amazon, the quintessential online retailer, opened a brick and mortar store that looks like it is about to marry both these worlds. It is called Amazon Go and is the first of what Amazon hopes will be the future of retail. It is a cashier-less store where you can walk in, pick up whatever you want and leave without ever once pulling out your wallet. The store uses machine intelligence and sensor fusion to identify the specific items that you take off the shelf, intelligently adding them to your virtual shopping cart and only debiting your Amazon account once the sensors in the store recognize that you have physically left the premises.
Leveraging sensors, the Internet of Things and a mobile application that can sense your physical presence in the store, Amazon seems to have eliminated the ultimate bottleneck in the retail experience—interminable lines at the checkout counter. In many ways this is the perfect fusion of online and offline shopping, blending the efficiency of cashless payment with the benefits of being able to physically examine the merchandise before buying.
I can see this form of retail becoming ubiquitous. While Amazon is rolling out the prototype at its own stores, as a product, I can see how this form of cashier-less retail can be reduced to a bunch of APIs (application programming interface) that anyone with the requisite retail real estate and sensor hardware can plug into.
This is the perfect complement to e-commerce and, to me, is the optimum blend of online and offline shopping where we can each choose the shopping experience we want. If we are buying commodities—like music, books and standardized electronic goods where there is no real advantage in physically seeing the product—we can shop online as there is no benefit actually going to a store.
But for all the more intrinsically unique products—fruits, vegetables, clothes, jewellery—that we need to look at, to touch and feel before we make up our minds to buy, we will have brick-and-mortar stores that we can visit. What technology will do is streamline both these shopping experiences making it so that apart from the process of actually deciding what to buy the rest of the shopping experience is completely seamless.
But I can see this going even further.
One of the driving factors of retail has always been real estate. Every retailer has to invest in real estate in order to have a physical space within which to display its products. But as we reorient our shopping habits to take advantage of these new formats of retail that modern technology offers, our traditional approach to retail real estate will change.
For instance, now that driverless cars are becoming a reality, in the next five years it should be possible for us to leverage autonomous platforms to bring retail to our doorsteps. We should be able to book retail appointments at our convenience, requesting driverless mobile retail stores to roll up to our doorstep, whenever we want, so that we can browse through everything they have on display and buy whatever we need using the seamless check-out facilities that we have already got used to in our cashier-less fixed retail stores.
This is the future of retail that our current state of technology is pointing us towards. And it’s just around the corner.
