Since Amazon's announced acquisition of Whole Foods, articles about the Amazonian dismantling of retail has reached an almost apocalyptic pitch. But spend any time in most retail stores today and you quickly realize they really don't much care that they are being displaced. The result of this apathy is clear, and it's difficult to see where most retailers are doing much of anything about it.
I had an all too common experience of the absolute lack of retail's willingness or ability to "get it" again a few days ago. I wanted a new pair of shoes and stopped by the Clark's store at an upscale mall nearby. I generally dislike malls, but clothes, including shoes, are something I like to try on before I buy. The store was staffed with late-teens and twenty-somethings, and I'd guess that they were there for summer jobs, probably being paid close to minimum wage and perhaps some commission. That's relevant to me because store employees are the single biggest representation of the brand to the customer. Even the nicest physical store experience can be ruined by an apathetic or inattentive employee, something I experience often.
There I was, ready to buy, and this was the best they could do
In this case though, I was greeted upon entering and had someone helping me in less than a minute. Good start. I showed the salesman what shoes I was interested in and told him my size, prompting him to excuse himself to the stock room to look for them. He was back there quite a while, maybe 5-6 minutes, and when he finally returned he had neither of the shoes I wanted in my size. What he did have were "similar" shoes in my size, which he then suggested I might like just as well. I didn't, of course, thanked him for his time and was about to leave. So far, a waste of time. But what he said next really struck me as an example of how retailers are completely blind to the world they live in. He said, "we can order the size you want, and can have them here for you in 7-10 days." Excuse me? So my experience is: I somewhat reluctantly drive down to the mall specifically because I wanted to try on shoes before I buy them. They don't have sufficient inventory for the shoes they are selling (and I have an average foot size, not unusually small or large), and the store's suggested solution is for them to order the shoes and have them in 7-10 days? This would then require that after that time I drive back to the mall, wait for an salesperson to help me, then try on the shoes to see if I like them. If all that goes well, I can pay them for the shoes I wanted 10 days earlier. There I was, ready to buy, and this was the best they could do.
Does anyone wonder why Amazon is eating retail's lunch?
It took me about a half-second to do the math on that and I told the salesman that I can probably order them myself from Amazon and have them in 1-2 days. He somewhat disappointedly thanked me and that was the end of the visit. I went back to my office, ordered the shoes from Amazon, and had them two days later. Shipping was free and if I didn't like them I could ship them back for free. The net cost difference was about $5 more on Amazon, only because the Clark's store had been running a sale at the time. For me, the time savings and convenience are easily worth $5, and in my experience Amazon often does better on price than many retailers, has better inventory, and free shipping with Prime. I still would really like to try on shoes before buying them, but guess what I'm not going to do next time I need a pair?
Isn't offering better products and services at better prices what competition usually aspires to do?
If I think through my shoe buying experience above the retail experience actually wasn't terrible, and in fact wasn't even unreasonable. I wasn't walking around barefoot and in desperate need of shoes, so waiting even 10 days would not have had any material impact on my life. Yes I had to drive to the mall, but it's not all that far away, and it's a nice mall, as malls go. The salesman was pleasant and eager to help, and buying from the store would help pay his salary and the store's rent at the mall, supporting the local economy. So that experience was fine… 10-15 years ago.
And that's the thing. What Amazon offers is just so much better at essentially the same price. Some might argue that Amazon is spoiling the expectations of consumers, but isn't offering better products and services at better prices what competition usually aspires to do?
The reality is that my failed experience with Clark's was actually better than the majority of my experiences with brick-and-mortar retailers. Staff that couldn't care less, poor inventory, disorganized displays, severe lack of convenience technology, and the list goes on. It all keeps me going back to my browser to have the things I need delivered directly to my home at great prices.
What I don't think brick-and-mortar retailers get is that they are not only in the inventory and monetary transaction business anymore. They are no longer the best place to go if you want to find a product. The internet and e-commerce have changed that forever. Retailers, like Amazon, are more and more in the service business. To have any hope of competing with Amazon requires that retailers offer a better service. And they, at least for the time being, have something Amazon doesn't. They have the opportunity to fully engage a customer with environmental experiences, hyper-local focus, and, yes, the human connection. Amazon gets this of course, and is moving from online-only into brick-and-mortar with acquisitions like Whole Foods and the creation of their own branded book and innovative grocery stores. Think about that. The excuse retailers give for being unable to compete is that they can't contend with Amazon's massive online inventory and low overhead, and Amazon is working to look more like those very retailers.
Except that they probably won't look like those retailers. My expectation is that Amazon will use it's incredible scale and logistics capability along with it's intense customer focus to figure out how to bring brick-and-mortar to the modern era. And if that means more and more existing retailers go out of business, in the end they will only have themselves to blame.