Physical retailing as media, distributors of experiences not just products, and technology-enabled to delight consumers and alleviate the “friction” associated with shopping — that’s just a small part of the retail landscape as Doug Stephens, retail futurist, author, speaker and founder of the advisory firm Retail Prophet, believes it should evolve.
On Wednesday, Stephens appeared at Story, the 2,000-square-foot store at 144 Tenth Avenue in Manhattan for coffee, bagels and a taste of retailing’s future as envisioned by him. The setting was appropriate given that Story has a forward-thinking business model, operating like a gallery by changing its interior decor and merchandise theme every four to eight weeks. Story is partnering with Jet.com around the idea of “fresh” featuring healthy foods, wellness, innovative kitchen gadgets, Mario Batali products, ecologically sound packaging for delivering perishable foods and many other inventive products and concepts.
With Story founder Rachel Shechtman asking the questions, Stephens had a menu for what retailers should and shouldn’t do to survive in the age of Amazon and changing industry paradigms. He gave a taste for what’s contained in his new book, “Reengineering Retail, The Future of Selling in a Post-Digital World,” and later signed copies.
Unlike other pundits, Stephens wasn’t all doom and gloom, yet he was still critical of the industry. “We are on the cusp of one of the most invigorating periods, but we have to break through this dark time ruled by Wall Street.”
He noted the ongoing narrative that retail is dying, but he sees it in transition, suggesting, “Physical spaces are becoming a form of media….Retailers need to be less about moving product and more about moving brands….Great retail is great theater where there is a kinetic contact with brands.”
He sees small entrepreneurs as industry leaders. “Who is really nailing it? The smallest retailers in tucked-away places,” Stephens said, citing Stockholm as an example. “They’re led by passionate entrepreneurs scouring the world for great product.”
He advocated technology to alleviate “friction” in the shopping experience and “enhance and delight” the customer. But don’t overdo it, he warned. “Technology is like syrup on pancakes. Syrup is great but too much of it makes you sick.”
What’s wrong with retailing? The focus on sales per square foot is “insidious,” Stephens said, with buyers erring on the side of picking what’s safe and less inclined to take risks that could advance the business.
Also, brands are “decoupling” from department stores, pulling out and creating really their own “cool experiences.…The ‘wholesale-to-retail’ model is breaking down.”
Most organizations don’t have a handle on their creative assets, Stephens said. “The first step is understand what your inventory of creativity is.”
“The notion of the mall as the center of life in a community is gone,” Stephens said, adding that “department stores can’t compete with the selection of products online, but they could be great spaces for experiences. It’s got to be less about moving products and more about moving brands” and creating “a theatrical model paid by the vendor up front.”
“Retailers really aren’t doing enough of the heavy lifting to create experiential design,” he observed. “Companies moving the needle are companies challenging the paradigms and not playing by the old retail calculus.
“Amazon looks at paradigms in retail industry as archaic speed bumps and is treating retail like science,” Stephens said. While Macy’s may be focused on how to outmaneuver Amazon, “Jeff Bezos is focused on robotics, artificial intelligence and space travel.”
For the small retailers and designers in the audience at Story, Stephens advised, “There are technological table stakes,” explaining that the product selection has to be understandable online, you need a mobile presence and you have to be active in social media, but it boils down to product. “If you are a new merchant, you have to come up with something remarkable — products no one has ever seen.”
He suggested that retailers, to be successful, must fall into one of two camps: fast shopping and slow shopping, and if you fall in between, you’re in limbo. Alibaba is an example of fast shopping. You get online, order, never leave your home and wait for the delivery. Slow shopping is about a “sumptuous, delicious sensuous experience,” à la Selfridges.