The future of retail, reflected in a skillet

October 17, 2012 By Mark Hurst 34 Comments

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.

COMMENTS

  1. Lars October 17, 2012 10:38 am

    There’s already a term for this – it’s called show-rooming and retailers hate it. That said, Amazon is also feeling the pinch of the fact that they can’t do same-day delivery in most places are concerned that retailers that already have boots on the ground (read: Home Depot, Best Buy, Lowe’s) are going to eat their lunch in the next few years as those retailers get better and shipping and broaden their product catalogs (look at the acquisitions they’re making – it is happening).

    • Gab Scali October 17, 2012 11:05 am

      It appears physically impossible that any retailer or even network of retailers could ever match Amazon’s catalog. I don’t have the numbers but I am inclined to believe it would take so much real estate that 1) it would be impossible to browse on foot and 2) it would make retailers’ costs prohibitive. You can’t repeat that kind of size shop in all the convenient places and still be competitive price wise. It’s a lose lose situation.

  2. Lynne Homeyer October 17, 2012 10:41 am

    One big IKR from me. I think fondly of my “wine guy” here in Grand Rapids – I don’t need online wine buys, I don’t need 3-Buck-Chuck from Costco. Because David does it all. Email wine-buyer alerts on amazing bargains and amazing expensive wines. Great in-store shelf info. He’s there to consult. I drive past 3 wine stores to get to him!

  3. Lydia Mann October 17, 2012 10:42 am

    Brilliant evaluation of a situation I’ve had trouble finding words for. I lament the loss of mom and pop stores on the Upper West Side of Manhattan (where I grew up and still live) not only for the variation, but for the service and personal attention that made me a loyal customer. I make a point of buying items from my local greengrocer because I really want him to stay open, even if I can save a few cents across the street at the ubiquitous Duane Reade/Walgreen/CVS.

  4. Rob Schmults October 17, 2012 10:43 am

    A big part of the problem you correctly highlight is the store employees are usually in the wrong place to help anyone. They are standing at the cash register collecting money. But that’s starting to change — and with surprising rapidity. Retailers as varied as Finishline, Lowes, and Urban Outfitters are joining Apple in untethering the POS and sending employees out on the floor. Yes they can still collect the money via a handheld POS, but they also can offer the klnd of service Mark found lacking. And for the less tech savy, they’ll be able to pull up reviews, content, etc. to share with the customer. Oh – and if they don’t have the color or size you want, they can order it for you right then and there. This isn’t going to be a panacea (having more unique product is the only thing close to that), but executed correctly, untethering the POS — and the employees — should help in the competition with Amazon.

  5. Scott Silverman October 17, 2012 10:59 am

    My question is that if the staff gave you good info about the products, had a fun cooking class, etc. and you still looked up the product and saw that it was $10 less (and you didn’t need the item immediately), would you buy it in the store or still go to Amazon to save a few bucks? What happens when Amazon can offer same day shipping?

  6. Scott Eves October 17, 2012 11:02 am

    Mark,
    One aspect of bricks and morter stores, which I suspect is largely unquantifible, is the instant gratification the buyer gets when purchasing. A significant number of consumers want to take home their new object (especially if it is something as sexy as a new frying pan!) and play with it right away. They don’t want to wait even one day to have that gratification, and that impatience is worth some small increase in the price.

  7. Mitch Speers October 17, 2012 11:03 am

    The key here is metadata. We’ve become accustomed to having it at our fingertips on the web, so it’s now expected in person as well. If the prices, product data & review info is all there in-store, I have far less need to fire up my browser to check Amazon. Mark, I agree with you that then leveraging the in-person experience more effectively is the only way retailers can hope to compete with the price+metadata advantages Amazon and others have built.

  8. Len Conte October 17, 2012 11:04 am

    Had a similar experience at Sears last week buying a Cannon Digital camera. I asked the sales rep if I needed a SD or SDH card ( I didn’t know the difference). She tried to look it up on her Sears online data sheet but couldn’t find the information. I showed her my a wikipedia definition on my iPhone. The search brought up a Best Buy version of the sqame camera $10.00 cheaper. She tried to price match but needed manager approval. After 10 minutes I finally told her “I going next door to Best Buy …. completly underwhelmed by both the sevice and her technical knowledge. I ended up buyng a more expensive version after Best Buy floor person explained some critical differences in the model I was looking at one one that was 10.00 more.
    Seras lost a customer, a sale and an upsale

  9. Leanne October 17, 2012 11:09 am

    I only buy things online/Amazon if I don’t need them more quickly. Often, particularly for cooking or tech purchases, I need the item that day, need to see it in person first, and am happy to pay a bit more for that experience (compared with purchasing online, risking, as you mention, not quite what I expected, damage in shipping, return hassle). The same experience for gifts — friend’s birthday party tonight, go to local store for gift. For your Best Buy steps 1-8, plenty of us don’t drive, we walk or bike or scooter or take public transpo to Best Buy or similar :)

  10. Lee Wright October 17, 2012 11:13 am

    In discussions about the competition between traditional (store) retailers and Amazon, many in the (non-tech) media point to the tax advantage that Amazon has (and that is going away in some states).

    Mark has it right: It’s the entire customer experience advantage, including time and location convenience (24 hours from any web browser), selection, and buyer confidence (extensive ratings and reviews). Regarding this last point, the best recommendation is going to come for someone who, in the Williams-Sonoma experience, might say, “The first thing you want to do is to match the skillet to the task. After all, there are many different types–shapes, sizes, and materials. So what are you planning to . . . Oh, let me tell you what I discovered. I used to use . . . and now I use . . . I’ve been cooking for more than 35 years and I’ve owned 11 different skillets of one kind or another, and as an employee I can try out any skillet I want, so here’s why this one is my favorite all-around, every day skillet . . .”

    That’s hard to do for one product, not to mention all of the high-involvement product categories, and then all of the other product categories, but it’s also the only hope of a traditional retailer. The face-to-face, back and forth with an informed salesperson with relevant deep experience will trump most online reviews, and if the price is close, the customer will most likely walk out of the store with the product. But when was the last time you had an experience that came even remotely close to that?

    A final note: As Mark noted, stores have the potential to offer the convenience of touching and interacting with the item–or at least can provide that convenience. A few months ago, when in the market for a laptop projector, I went to the nearby Staples. Wouldn’t it have been great if I could have tried a few so I could compare, side by side, brightness, resolution, picture adjustment, and the like? Too much to expect, I thought. But I found when I got there that I hadn’t lowered my expectations enough. What was on display? Models. Paper boxes that were made to resemble the projectors. This eliminated any opportunity to judge weight, inspect the item, or get a sense of build quality.

    The response of the manufacturer and the retailer would no doubt be the high cost of providing each store with models to display. While that may be true, this fuels the downward spiral and leaves retailers stocking the must-haves and costly-to-ship items. And every experience like this increases the likelihood that you won’t even bother going to the store and will instead opt for the customer experience Amazon provides. Even worse for traditional retailers, younger generations of buyers will start with the knowledge that online is the better experience and won’t even consider a store.

  11. Lori Lum October 17, 2012 11:23 am

    I’ve also had this experience at the big box stores, the Best Buys and the Williams-Sonoma have become showrooms, but the customer relationship is limited and the knowledge and engagement even less so.

  12. Marty Keane October 17, 2012 11:35 am

    Great post, Mark. Williams-Sonoma, which does a decent job online of providing information and product reviews, failed to do the same thing in their actual store. They failed to create an experience that would help you find the right skillet. They’re relying on their people to fill in those blanks, but then tether those people to the register or have them doing other store tasks — or maybe they’re just helping other people. The “win” here would be to offer the information from their website right on the products. Update the tags each month with the star ratings from the website. Give customers free wifi when they walk in the store and default them to williams-sonoma.com. Use geo-targeting to make that experience specific to the store they’re in. The advantage the stores still have is that people can touch, feel, try the product and get it immediately. The stores can also hire people who use what they sell to make it an even richer experience — or at least train them to know what they sell. They have to press that advantage and improve upon it or become irrelevant. People will pay more for good service and a good experience.

  13. Rebecca Zweig October 17, 2012 12:04 pm

    This is an excellent post and can be applied to every business. Thank you!

  14. Reid Neubert October 17, 2012 12:15 pm

    I couldn’t agree more. One of the problems is that retailers have largely unknowledgeable staff, so even if you find someone to “help” you, they often don’t know more than you do.

    Here is another experience I had: When shopping for a new monitor, I went into Worst Buy and other stores to shop and compare. No luck! They had all the monitors running HD videos. I wasn’t shopping for a TV set, I was shopping for a monitor. I could care less what videos look like on my computer, I use it to work! I wanted to see what office applications and Web browsing looks like, not video. No one in the store knew how to set the monitors to run Windows instead, so the trip was useless!

  15. Stephanie October 17, 2012 12:21 pm

    I think, Mark, perhaps you are not William Sanoma’s target audience? Isn’t understanding your main audience the whole point to good experience?

    Meta information for a cast iron pot is quite different than meta information about a high definition TV. I would *never* go to Amazon to buy a Le Cruset and I don’t care if they discount the price a little. 1) The entire experience of shopping AT William Sanoma is completely different than shopping ON Amazon.com. 2) Cooking & food are sensory in a way that can’t be replicated online. 3) I AM their target customer… I am confident in my cooking abilities, I don’t need to read a bunch of stranger’s reviews for a high-end product like Le Cruset.

    I agree, it is extremely annoying when retailers don’t communicate well and you have a not so awesome experience. But imagine how lame the world would be if delightful shops went out of business over $10 discounts and random users reviews. Ultimately diminishing good real world experiences over time.

  16. George Girton October 17, 2012 12:51 pm

    Mark, while you were shopping at Williams-Sonoma, I was visiting a local bookstore. That’s right, there are still one or two of them left! This one, Diesel Books in the Brentwood Country Mart, has three modes of providing information about their wares: 1) The books provide their own information of course, and you can leaf through them. 2) The knowledgeable employees will talk to you, listening and speaking etc. etc. and 3) approximately every 18 inches along the bookshelves is a handwritten recommendation for a book. Browsing through these recommendations & occasionally removing a book from the shelf to page through it is a fascinating experience in and of itself. Even if Williams Sonoma is not lifting a finger to compete, Diesel Books is on the move. Sad to say, they did not have the book I was looking for, Chrystia Freeland’s recently released Plutocrats, which I obtained later in the day from Barnes and Noble, and which I highly recommend.

  17. Lesia Valentine October 17, 2012 1:15 pm

    You’re absolutely right, but good luck finding sales people who want to learn the products well enough to fulfill your wish when retail stores only pay minimum wage. For that price, you get kids, and kids are too busy texting and chatting with each other (as in Best Buy) to care if they sell the product or not.

  18. Jeremy Coatney October 17, 2012 1:51 pm

    I do appreciate this idea, but it’s exactly the kind of arguement used for how a small business can compete with the Walmart that was built next door. Sure they will maintain a certain amount of traffic this way, but most people do not have sufficient money or inclination to pay a higher perceived price for products, so regardless of the fact the store is right there, or whether or not it offers great customer experience, people will largely tend to flock to the lowest price point, followed by the least amount of ordering effort (not necessarily fulfillment time.) It’s a long standing pattern of behaviors; the customers that will prioritize service and experience are a rare breed, and even they can be tempted from always shopping where they get that experience.

    Remember that as people move to shopping less at physical retail locations it will become more costly to maintain them. If it gets really bad they’ll have to reduce their size and selections, which tends to impact customer inclination to shop there. It can also force raising prices, which further reduces the customer base, and so on.

    A lot of people talk about the Apple store, but think about how many people actually shop at the Apple store. Who are they, how frequently are they buying, how many of them are there, why did they actually stop in, and how much does that kind of service model cost to maintain? Is that business model actually sustainable itself, and if so is it actually applicable to a megastore? Can the half of the country that is poor afford to entertain shopping at a place that emulates the model of a designer electronics boutique? We’re talking the home of laptops that cost over $1,000 minimum when their nearest competitor’s prices start at around $200 despite the fact most of their internal compotents are identical.

    I cannot help wondering if you have properly researched this idea and thought it through as an actual business model.

  19. Bharat Gera October 17, 2012 2:00 pm

    isnt it possible to bring digital into customer experience at the store, shouldnt be too difficult to pull detailed product info from a catalog and display on ur mobile by scanning a qr code for the product.

    agree totally that brick and mortar retailers need to focus on customer experience. why not hold a cooking class instead of demo and even charge for it. very often, we buy stuff that we dont even know how to use well enough.

    there is a lot that retailers can do to compete with Amazon, they are just too big to change themselves and do what is necessary.

  20. ed sobey October 17, 2012 2:01 pm

    Stretching this out to the non profit world, museums have missed this point. Most of the 9,000 museums in the US have not recognized that there is an internet and that it provides competition for them. Instead of adjusting their “product line” to be effective, they ignore the internet. Amazon, Wikipedia, and others are causing a revolution – some industries recognize this and take advantage of the disruptive innovation. Others, sadly science museums, have not yet. Change for them will be painful.

  21. Bill Galfano October 17, 2012 7:02 pm

    Mark, and others, there are retailers solving exactly this. Granted, the example of Burberry isn’t the same as Best Buy to Amazon, but you get the idea of the role of in-store customer experience.

    http://uk.burberry.com/store/experiences/regent-street/#/flagship/1

    • Gab Scali October 18, 2012 5:08 am

      Burberry has a tiny catalog of very very overpriced items and markups so big that this become possible (until people won’t know better than falling for this luxury brands hogwash, that is).
      The example you make has very very limited application and doesn’t really say anything about normal people buying normal stuff in a place that is not Regent street or Park Ave.

  22. David Ellsworth October 17, 2012 7:12 pm

    Keep in mind Apple doesn’t have it completely right yet. Their Express checkout is cool in theory, but you did hear about the guy who spent the night in jail after attempting to purchase some headphones? I had my older iMac in the local Apple store over the weekend getting a new power supply and picked it up this morning and the “genius” ran my card and I left the store with my iMac. He called later this afternoon and said the transaction didn’t go through – to call and give me the info again over the phone. I called and the person said they needed someone with more authority and they weren’t available and would have to call me back. It’s been hours already.

  23. Doris October 17, 2012 9:40 pm

    Mark -GREAT post!!! Just to add insult to injury, I spent hours in the Union Square Diesel store buying my hubby jeans only to find out upon returning home that they were too big for him. He ended up finding the exact same jeans on Amazon in his size $40 cheaper and he never left his chair!!! Incredible

  24. James Marciano October 18, 2012 9:36 am

    This may be a shameless plug for one of my portfolio companies, Dillon Road, but it is to your point .. we (and our competitors) change the men’s custom clothing buying experience by going to a man’s home or office. Not only is it a custom fit (we measure and go through all the options, one on one), but we go to them, both to measure, as well as to bring the item back 3 to 4 weeks later. We compete on the experience.

  25. Dan Faricy October 18, 2012 12:08 pm

    One thing I fond interesting in your photo, is the “paradox of choice”.

    There are 7 items that are the same dish, but on different shelves and not labeled.

    Is this their inventory, out front and center? These are expensive pans. Not sure they understand the buying behavior of the consumer.

    Thanks for the great post…

    • Brian October 18, 2012 4:04 pm

      Dan, those are not the same “dishes”, they are all different size and shape variations of Le Creuset cookware (not saying the paradox of choice may not still apply). They merchandise showroom-style, so that is not inventory meant for selling (their associates bring out boxed units per each customer purchase).

  26. John October 18, 2012 3:12 pm

    I hate to break it to the author, but showrooming is a two way street. Do what I do and check out the Amazon reviews while browsing through Williams Sonoma and then buy the one with the best reviews at Williams Sonoma on the spot. Since California required Amazon to include sales tax the price differential has shrunk and you’ve saved the potential hassle of missing the postman and waiting in a long line at the Post Office. In my experience, the lines at Williams Sonoma are much shorter than at the Post Office.

    • Mark Lanham October 22, 2012 6:19 am

      This is also a good point and something I have had to do on many occasions.

  27. grace October 18, 2012 5:40 pm

    At least one person on this thread mentioned instant gratification as the one advantage brick & mortar retail has over internet shopping. I just saw a Best Buy Express in an airport. You need headphones, a battery, to replace a broken phone, and you want it now.

    Now, let’s talk about 3D printers. Imagine a world where you can walk into a retail store and dial in your requirements, add your customizations, you push a button, and the object of desire is in your hands. It might motivate you to get of of the house.

  28. Mark Lanham October 22, 2012 6:17 am

    Great deliberation, I hope Williams-Sonoma are going to read this and act on it!

  29. Tom Groenfeldt November 30, 2012 8:04 am

    Check out Kramerbooks in Washington, on Dupont Circle, if you have a chance — a cafe/bar attached to invite people to linger, and a great selection of periodicals, with a lot on politics as you might expect…if I could try out music at a store while sitting in a comfortable chair like some Starbucks offer and look at other merchandise like Williams Sonoma and in the afternoon try one of their fancy glasses with some decent wine — that could be experience shopping.

  30. John Payne March 19, 2013 4:31 pm

    Thanks for this sad story. It’s sad because the retailer involved gave you the worst of all worlds.

    In the ‘dirt-world’ of traditional retailing, they missed outon appealing to your senses, providing you with information, and supplying a friendly, helpful, knowledgable staff member. In short, they didn’t do any of the things that have made traditional retailers successful.

    In today’s world of online and mobile marketing, they also failed dismally. A QR code for each item would have allowed you, with your mobile device, to go to THEIR website, where they could have provided product information, had links to 3rd. party reviews, suggested alternative products, presented bonus offers, invited you to join their email list, like their Facebook page…