By David Diamond
Technology lets consumers shop a retail store and its online competitors at the same time.
Who says you need to shop where you buy?
The first decade of the new millennium saw the traditional retail model change for many stores in many ways, including home delivery and pickup.
Around 1995, a retail pundit said that "lots of things will never be sold over the Internet. For example, who would buy shoes without trying them on?" With more than $1 billion in sales, online shoe retailer Zappos has taught that pundit (me) just how wrong that statement was. New, Internet-driven business models have the effect of opening consumers' minds to retail approaches beyond "I came, I bought, I left."
The first change is the connection between shopping and buying. Who says you need to shop where you buy? With mobile devices, you can actually buy from one store while shopping in another. I've watched consumers shopping in higher-end stores select the mega-TV of their dreams, and then go to bestbuy.com to order it for a lot less money (a practice known as "showrooming").
And while we're at it, even if I'm buying from the store I'm shopping in, who wants to drag a heavy item home – why not just buy it in the store and arrange to have a "fresh" unit drop-shipped from the warehouse tomorrow or the next day? And for that matter, who cares whether the store has the exact item you're shopping for? If I find a sweater I love, but see that the store has the XL size only in green rather than blue, why shouldn't I pay for it and have the store ship a blue XL to my home for delivery tomorrow?
The traditional order of things is quickly being upended. Average consumers no longer think of shopping as an ordered process of going to the store, picking out things in their preferred stores, paying for the items and taking them home by car. In fact, they may or may not go to the store, and they may end up picking out something that the store's out of, and they may or may not buy and pay for the items in that store, and they may or may not take them home. Everything is now up for grabs.
What does this mean for an independent grocery retailer? While the implications of this shift are not as profound for us as they are for a clothing or electronics retailer, they'll still affect our lives, and also provide us with real opportunities. First and foremost, with low-cost software now available, all good retailers should offer a shop-at-home/delivery option. It's now easy enough to do, profitable enough and important enough to your best customers that you need to provide the option even if few use it.
Second, you should offer a shop-at-home/pickup option. This is becoming increasingly popular, as it avoids adding on large delivery charges and creates the opportunity to sell add-on items on pickup. It can be a powerful addition to your service offerings.
And third, you should really think about how you respond to consumer requests for specific items. We all know that an out-of-stock or an item-not-carried is the best way to drive a consumer out of your store and into the waiting arms of another retailer that has the specific item ready to go. Don't lose that customer. Instead, be ready to find out exactly what your customers want and do what you need to do to get it – even if that means shipping it to a customer's home.
If you embrace and execute against these three approaches, you can take the changing nature of the store shopping experience and make it drive your business forward, rather than holding it back.
David Diamond is an independent consultant to leading retailers, manufacturers and service providers in the grocery industry. He can be reached at email@example.com.
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
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