The future of retail, reflected in a skillet
I recently went shopping for a skillet and came away with a glimpse of the future. It was in the Williams-Sonoma flagship store in New York, across the street from Central Park:
Entering the store I quickly found the cookware section, filled with pots and pans from a handful of top brands. I found myself standing in the Le Creuset section, full of attractive, solidly built products. Yet as impressive as they were, there were some important items lacking. Take a look:
What’s missing is data. Look closely and you’ll see that several of the pots have no label below them. Others have no price. And, this being a retail store, there were no customer reviews. I also had no way to compare Le Creuset to other brands, and no way to understand which product type – copper? cast iron? steel? anodized? – would work best for me.
And I was standing alone. No one at any time approached to offer help, even though I was circling the cookware section. (This might have just been a momentary lapse, as I’ve seen helpful staff on other visits.) Overall the store lacked information on its products – call it a “data desert” – which led me to pull out my iPhone and open the Amazon app.
Within two minutes I had read a half-dozen customer reviews and compared prices. The skillet was a good choice, and as it turned out, Amazon was $10 cheaper and offered free shipping. A couple of taps later I had ordered the skillet from Amazon – and avoided standing in a checkout line. As I walked out, I couldn’t shake the thought that within a few years there might not be a Williams-Sonoma store across from Central Park.
It won’t take long for more customers to have this experience. In fact it’s already happening: retailers everywhere are seeing customers use their stores to try out products in person before ordering from Amazon. The retailer pays for the rent, electricity, and staff to keep the store open; Amazon has no such expenses and offers the lowest price along with a vast collection of customer reviews.
I don’t mean to pick on Williams-Sonoma, as just about every major retailer is beginning to feel this effect. Some are taking action. For example, electronics retailer Best Buy has announced that it will match the prices of “online competitors” (read: Amazon). However, the Wall Street Journal reports that the small print restricts the guarantee to “when it makes sense.” And the customer has to specifically ask for the price match in the first place.
If I understand correctly, the customer experience at Best Buy will be: (1) drive to the store, (2) hope there’s enough product information to make an informed choice, (3) check the Amazon app to see if Best Buy’s price is higher, (4) find a salesperson, (5) ask them point blank to match Amazon’s price, (6) convince them that it “makes sense” to do so, (7) wait in the checkout line to pay, and (8) drive home.
The alternative is to stay home and (1) open the Amazon app, (2) read the product information and reviews, and (3) tap the “buy” button.
It doesn’t look good for Best Buy, at least in that comparison. But there’s another way to think about it.
Williams-Sonoma and Best Buy face a common challenge – and it’s not Amazon. I repeat: the strategic challenge is not becoming more like Amazon – that’s a slow, painful, losing battle. Instead, the challenge comes from the customer. What can a retailer provide in the customer experience that Amazon can’t provide?
Physical presence. Retailers can survive only if they take the liability of brick-and-mortar stores, and the overhead that comes with it, and turn that into their key advantage. The question around the board room should be, what does our physical presence allow us to provide in the customer experience that Amazon can’t?
Putting the product in the customer’s hand. Demos. Knowledgeable staff that can compare across brands, give context on the product class, and show how the thing works. Why not a cooking demo, right there in the store? Not once a week: immediately, on the spot. Show customers why this is the best choice. Turn on the HDTV and let the customer try it out in a no-pressure environment. (Study the Apple Store, centered on playing around with the products.) Most importantly, allow the customer to swipe a card right then and there (skip checkout; again, study the Apple store!) and walk out of the store right away with that item. No waiting three days for delivery, no risk of shipping damage, no shipping costs, no Prime membership. Try out the product, swipe the card, and walk out with it. That is an experience that competes with Amazon.
Of course, this is easier said than done. (Leave it to the customer experience consultant!) The high-service, high-knowledge, high-touch experience won’t be an easy strategy for a large retailer to roll out. But it’s hard to see any other sustainable advantage. Companies today compete on the customer experience, and Amazon has set a high bar. Other retailers will have to decide whether they want to compete.