28 May Agnochannel – What’s The Definition of a Retailer in 2015?
TL;DR – The Retailer of the Future Won’t Look Anything Like The Retailers of Today
Is Google a retailer? Is Apple? More people search for product information on Google than any other digital source and Apple is now the #2 eCom retailer in the world in terms of sales, and could easily leverage that position. So are these entities true retailers?
Here’s what Wikipedia says:
Retail is the process of selling consumer goods and/or services to customers through multiple channels of distribution to earn a profit. Demand is created through diverse target markets and promotional tactics, satisfying consumers’ wants and needs through a lean supply chain.
By that definition, both Google and Apple are retailers. The larger trend is an outsight shift in consumer behavior away from physical retail to virtual and automated formats. Traffic counts for most of the nation’s physical retailers have been flat at best and mostly declining over the past decade. Are we now at a tipping point where that trickle becomes a flood? Many scaled businesses are seeking to jump in and provide different parts of the supply chain; even Über is becoming a retail service provider by delivering meals and other products to time-starved consumers.
Where is Retail Headed?
With Google, eBay and Amazon all seeking to step into the product editor role based on consumer needs, the future seems to point to a flatter supply chain bringing manufacturers nearer to the end consumer increasing overall channel efficiency. As Amazon has proved through on-click ordering and Prime, removing friction from retailing is a clear path to building loyalty and shopper frequency. Google’s new buy button (along with Pinterest, Instagram etc.) can rapidly redefine how consumers shop as they discover, acquire and share products and services with a single click.
This is obviously not lost on traditional retailers. Walmart is testing unlimited shipping at a 50% discount to current Amazon Prime pricing. It’s likely that most consumers will consider free shipping tables stakes for eCommerce transactions especially for consumables. Mondelez estimates that 10% of its total volume will come from eCommerce within 5 years. For regularly used items like toothpaste, paper towels, potato chips, personal replenishment is available via Amazon’s Subscribe and Save program. The company’s Echo product creates a voice activated list-building functionality that extends its reach all the way into consumer’s homes.
Omnichannel, a buzzword that originated in the retail space several years ago is now the darling of media delivered across multiple digital platforms. I suggest that a new consumer expectation is Agnochannel, where channel becomes less relevant where simplicity, speed and convenience trump other considerations in the purchase hierarchy. The infrastructure for this behavioral change is already coming into being. With Apple Pay already accounting for 1% of transactions and rapidly growing at Apple Watch comes online, it’s reasonable to believe that Apple could also become a retail conduit for consumer products much like it is with iTunes.
Like media, the retailer of the future is what the consumer decides it is.