Clicks And Mortar
Jan'2013: Marc Andreessen predicts the absolute death of all physical Retail (Software Is Eating The World): “Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice.”
- His partner Jeff Jordan had a series of posts about this trend in 2012.
- why have stores?
- get it instantly
- have it delivered/installed
- try before you buy
- check/confirm size/fit, color, superficial quality (finish)
- make returns
- purposely limit (curate) your choices so you can just pick (vs Too Many Choices)
- anchor for integrated services (installation, service, recycling)
- Reid Hoffman disagrees. Software will not replace all offline retail, but will be used instead to transform certain offline retail experiences. Software can bring more customers to the stores, increase conversion in the store, reduce overall costs for the retailer via better analytics on supply and demand, and -- for the customer -- create a radically better real life shopping experience.
- Dalton Caldwell notes that it won't take much revenue-drop to kill Big Retail because of their high debt (Leverage) (sounds like Newspaper Publishing).
- The e-commerce sales of traditional brands and retailer, such as WalMart, Macy’s, The Gap and Lulu Lemon, are growing by leaps and bounds. In fact these players actually capture the biggest slice of the ecommerce pie today, and in an Omni-Channel world they will gain in strategic advantages and continue to dominate the market... Retailers like Walmart and Macy’s have come to realize that omni-channel customers purchase 30-60 percent more than a single channel customer. Consequently Macy’s is planning to install WiFi in all of their retail locations to facilitate online purchases while in-store. They are embracing the concept of “endless aisles” where consumers can find products beyond what is available on the shelf... Big Data is also giving omni-channel retailers another powerful weapon against 1.0 and 2.0 e-commerce companies... In addition, omni-channel allows brands and retailers to engage the consumer in multiple TouchPoint-s to optimize the shopping experience, ultimately influencing the consumer behavior fluently across channels.
- “I want to trade as an Internet company, not a retailer.”
- Ajay Agarwal predicts that over the next five years consumers will experience completely new retail models that effectively use physical locations combined with world class Internet and mobile sites to offer truly unique and delightful shopping experiences for their guests. These retailers will thrive. These companies will transition to “lower-cost” and smaller retail footprints. They will utilize these spaces as a major asset to improve the costs and friction associated with shipping and returns; to offer new and innovative ways to promote product discovery; and to offer levels of service and entertainment that will be difficult to match by algorithms and machines on the Web... There are significant portions of the ecommerce technology value chain that are still unsolved by startups or legacy vendors... Over time, the definition of “ecommerce” is getting broader. Every business is an E Commerce business.
- WalMart’s major E Commerce advantage, said Joel Anderson, chief executive of Walmart.com, is its 4,000 stores. They provide a network of distribution points for things like same-day shipping and in-store pick-up. That is particularly helpful for the quarter of Walmart customers without credit cards or bank accounts who previously were excluded from e-commerce, he said, because they can order online and pay with cash in a Walmart store. To start, the lockers will be available this summer in about a dozen stores in one market, which Walmart declined to name. Customers can avoid shipping fees and pick up their items whenever it is convenient, 24 hours a day at some stores, without interacting with a clerk... Walmart is testing a new Mobile app for shopping in stores. Shoppers can add items to their lists using voice or by scanning bar codes. When they enter the store, the app directs them to the aisles where their items are located. It keeps a running total of the items in shoppers’ carts, offers digital coupons and receipts and lets people check out themselves and order items online if they are not available in the store. Already, 12 percent of e-commerce sales through Walmart’s mobile app comes from shoppers using the app in Walmart stores, the company said. Over all, a third of Walmart’s e-commerce traffic comes from mobile.
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