Coronavirus coverage is everywhere. One cannot turn on the TV, scroll through social media, or shout at his or her neighbor from more than six feet away without hearing or seeing something about it. But, as important as the coverage is, it shouldn\’t be all consuming.
Amid all the craziness, all the kids interrupting work-from-home conference calls and all the figuring out where to store the toilet paper, now is also the time for happy thoughts. It is important to remember that the retail industry was on an important upward trajectory just weeks ago. The much-maligned industry was finally getting the punchline to the joke of retail transformation and setting the foundation for a fun-filled next few years of rapid change.
That which does not kill us makes us stronger and, while that is in no way a happy thought, one can expect the industry to come out the other end of this whole predicament better than it ever was before. That, for one, has me at least smiling about something.
[callout]The retail industry was on an important upward trajectory just weeks ago. The much-maligned industry was finally getting the punchline to the joke of retail transformation and setting the foundation for a fun-filled next few years of rapid change.[/callout]
Before everything started, there were amazing trends brewing in the world of retail, trends that I fell in love with and no doubt will fall in love with again. It is inspiring to think about in many ways. If the coronavirus does anything, it should give us the inspiration and hope to fight for what these trends may mean and how they may bring us one step closer to the light at the end of the transformation tunnel.
So, here then, like a good Gabriel García Márquez re-named novel, Retail Love in the Time of Coronavirus, is where and how my love for the industry will grow only deeper in this time of coronavirus.
#1 – There will be a new \”S\” in BOPIS
BOPIS or buy online, pickup in-store is so 2019. The new working definition of BOPIS was already becoming, and is now even more so after the coronavirus, buy online, pickup in something or somewhere.
Target and Walmart deserve kudos for leading the charge here. Walmart, with its Super Bowl commercials about grocery pickup, and Target, with its drive up in your car order pickup service, are setting the pace for others to follow. After years of lagging digitally, both they and others (especially now with the outbreak) have realized that a store can be just as convenient a place or even more so in people\’s lives than a front doorstep. For many consumers, the physicality of convenience still matters.
And, the trend won\’t stop there either.
A \”store\” is one thing, but the word \”somewhere\” is left open to the imagination, just ask Judy Garland. Somewhere can be a place of even more convenience. It could be one\’s work, one\’s gym, or one\’s town square. It can be by way of smart lockers, autonomous vehicles or super-duper automated vending machines designed for cars to drive right up alongside them. Kroger\’s recent experiments with Walgreens and Starbucks\’ new pickup-only store are great examples on the front side of this trend.
Extrapolate the trend out even further and \”convenience hubs\” (my quotes) could one day soon be placed throughout cities and used in concert with the latest advances in micro fulfillment and other supply chain technologies to defray supply chain costs and to put goods in people\’s lives at the moments when they need them most.
It\’s like a reimagination of the post office or the local general store that goes beyond retail. It is a change of potentially seismic proportions, and the coolest thing is that the word \”store,\” whether in reference to digital or physical retail, almost has nothing to do with it.
#2 – More revolutionary business models will emerge
Another indication that the retail industry was headed in a great direction prior to the outbreak was the rapidly advancing pace of concept store work. Two years ago, one could count on one hand the number of new concept experiments retailers were putting into the market (and, by concept, I mean ideas akin to a concept car in the auto industry — i.e. ideas that companies put out live in front of consumers still knowing they could fail).
Now the situation is different.
In the last few years alone, there has been a plethora of new activities. Sam’s Club Now, Nordstrom Local, Starbucks’ Pickup Only store, Fleet Feet Drop Shop, and computer vision checkout-free concepts galore, spurred on by Amazon Go’s arrival in early 2018, have all rode the recent zeitgeist of gutsy retailing.
What all these concepts have in common is that they are all unafraid to push boundaries. They are not faux innovation from digitally native brands going into physical stores for the first time, with retread business models propped up by VCs and profligate spending on Instagram ads. They are ideas that push the boundaries of existing business models and consumer behavior.
Sam\’s Club now reimagines a personalized warehouse club experience by way of the mobile phone. Nordstrom Local plays off trend #1 above and asks how a traditional department store can be more of an everyday part of one\’s community outside the outdated construct of a shopping mall. Starbucks\’ Pickup Only Store shows how post-purchase human service design can be cheaper and more inspiring than a pre-purchase design. Fleet Feet Drop Shop uses 3D foot scanning technology to take inventory and subjectivity out of an important tactile part of the shoe buying process. And, Amazon Go, well, it says to hell with lines…forever.
Where the convergence of all these concepts lands is anyone\’s guess, but oh what a wonderful world it could be.
#3 — We will wake up to cheaper coffee
Thanks to Panera, 2020 has also already heralded a new morning reality when everything returns to normal in the future — the subscription cup of Joe.
In late February, Panera announced that customers could pay $8.99 per month for a daily dose of nearly every American\’s favorite narcotic. Regardless of what you think of Panera itself, the announcement is important for a number of reasons.
First, breakfast is one of the few mealtimes still fueling sales growth in the quick-serve and convenience store industries. Second, morning coffee is an indelible routine for countless Americans. Third, if Amazon, Costco, and others have shown the retail industry anything this past decade, it is that consumers will pay upfront for value.
Put all three of these concepts together, add a dollop of the incredibly high margin on a cup of coffee too, and the Cola Wars of the 1980s may soon not a hold a 64-ounce Big Gulp to the morning coffee wars that are about to brew when all the coronavirus demand is released back into the wild.
The best part of waking up won\’t be Folgers in your cup, it will be $5 a month coffee at the nearest gas station.
#4 — Amazon will go green
Wait, what? Amazon? Going green?
Yes, you heard that right. Amazon has given all indications that it plans to get green in a hurry — by way of fresh produce and vegetables via a new grocery store concept it plans to debut soon.
While not the \”green\” that the above phrase typically conjures up, it is the green Amazon likes in spades, as in the green that comes when \”your margin is my opportunity,\” as Jeff Bezos reportedly and once famously said.
And, that\’s ok.
Amazon had planned, prior to the virus at least, to open its first full-scale grocery store in Los Angeles sometime in 2020. With it comes the promise of even lower prices on everyday things Americans need and don\’t need, from fresh fruits and vegetables to name brand sugary snacks. All of which is a potential far cry from Portlandia-fed chickens at Whole Foods.
It is an audacious goal to break into the nearly $1 trillion U.S. grocery business. Many have tried, and many have failed. It takes understanding merchandising, store operations, and supply chain complexity at levels Amazon has not yet breached. But, if Amazon can pull it off, like it almost always does, then chances are Americans will shop more easily and conveniently than they ever have in the past, and the store itself will be just one deeper press of the drug-laden needle into the American consumer\’s arm that is Amazon Prime.
It won\’t be easy being green, but when has audacity ever scared Amazon? Especially when the company is led by somebody who wants to colonize outer space?
Come hell or high water and virus be damned, an Amazon Grocery Store is going to happen, and when it does it will be Must See TV, likely brought to you by Heidi Klum and Tim Gunn on Amazon Prime Video.
#5 — Walmart becomes the nation\’s \”Plus One\”
With Amazon gunning for grocery, Walmart, god bless \’em, isn\’t sitting back either. The first few months of 2020 showed that Walmart is clearly on the offensive.
Exhibit A: Walmart+
The indefatigable Jason Del Rey of Recode reported in late February that Walmart plans to launch a new membership program, in the same vein as Amazon Prime, called Walmart+.
According to Del Rey, in addition to offering de rigueur shipping services, the new program will also \”add more perks, which could include discounts on prescription drugs at Walmart pharmacies and fuel at Walmart gas stations, as well as a Scan & Go service that would allow shoppers to check out in Walmart stores without waiting in line.\”
The beauty here, if the reports are true, is that Walmart is finally flexing its muscle. Walmart, like Eminem in 8 Mile, is saying to Amazon, \”Say all that you want. Do all you want. We are what we are. And, we are here for the American people.\” Discounted doctor and dental services for the uninsured, gasoline, hell even cups of coffee tied to a subscription are all in Walmart\’s wheelhouse, and Amazon is years away, if not decades away, from ever having the physical locations to put in place a plan of any similar ilk.
With Walmart+, Walmart has the chance to celebrate the \”why\” in why come to a physical place or a physical store to shop. Amazon doesn\’t have Walmart\’s physical assets to any same degree, at least not yet. And, these assets are already proving all the more important right now as humanity matters more than ever, as communities coming together matters more than ever, and as keeping the American dream alive more than ever too.
Ah, retail. There\’s just still so much more to love.