Thinking outside the box

Alternate store formats compete against both bricks and clicks

You can call it "taking the store out of the store." Whatever you call it, it's certainly another example of how routine the shattering of retail paradigms has become as retailers — online, brick-and-mortar and everything in between — find new ways to connect with consumers.

Last month, Amazon announced that it would give Los Angeles-area members of its Amazon Prime service a free trial to Prime Fresh, which includes same-day delivery of fresh groceries, as well as such products as toys and electronics, along with free video streaming and free shipping. The company has been piloting grocery delivery in Seattle for almost six years.

Amazon is hardly alone. In November 2012, eBay unveiled eBay Now, allowing customers in New York with iPhones to order from a variety of local retailers, ranging from Macy's to Walgreens, and have their items delivered anywhere based on the GPS reading from the phone — whether or not it's an actual address. Retail industry futurist Doug Stephens told DSN about a delivery he received while sitting on a bench in Central Park.

More recently, eBay in June also unveiled in New York a new program that repurposes empty storefronts into virtual vending machines, installing product displays together with giant touchscreens that allow customers to order items as they would from a computer. In a similar vein, British supermarket chain Tesco has turned entire walls in the Seoul, South Korea, subway system into virtual supermarkets where customers can order items online by scanning QR codes with their smartphones. Target and Ahold's Peapod division have launched similar efforts in the United States.

"QR codes are really starting to explode right now as a mechanism for retailers to develop better connectivity with customers," L.E.K. Consulting retail and consumer goods practice partner Dan McKone said, citing one client that is looking at setting up virtual product displays at events. "I think for retailers, a lot of the more exciting trends go back to mobility."

It all goes back to the ultimate purpose of retailing: getting products into the hands of consumers. The retail industry underwent a major paradigm shift when people shifted their shopping from specialty shops to such one-stop-shop stores as supermarkets and mass merchandisers. Now, it's happening again as brick-and-mortar stores give way to omnichannel retail. For a retailer that has always been digital, like Amazon or eBay, this is a simple concept, as it is for new brick-and-mortar retailers built on the premise of omnichannel, such as Hointer, a Seattle-based clothing store founded by a former Amazon executive that uses smartphones and robotics to give customers an online-like experience in the store. For traditional brick-and-mortar retailers, bringing that "traditional" shopping experience into the 21st century creates challenges and opportunities. "So much of online strategies that we're focusing on right now are how people can drive customers into the store," McKone said. "What we've been seeing most is folks saying, 'Hey, a lot of these mobility trends have been happening, so how can we capitalize on them?'"

Office-supply chain Staples may have found a way to do this with a new omnichannel concept store unveiled in Norwood, Mass., and Dover, Del. The two smaller footprint stores feature kiosks that allow customers to order more than 100,000 items, as well as a business lounge with meeting space and work stations.

Vending machines represent another way to take the store out of the store. Cleveland-based Max-Wellness operates a handful of stores in Ohio and Florida, but it has extended its reach beyond its core market with "Wellness in a Box" vending machines placed at airports around the country selling such items as pain relievers and compression socks. "We put them in airports because there's an immediate need if you have something that needs attention," Max-Wellness founder and CEO Michael Feuer said. "It does start to give us national recognition as a brand."

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