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Investment into physical retail: Investment into experience

By November 6, 2018News

Toys “R” us, Radio Shack, Sears- once so dominate they seemed infallible, yet they share one commonality; bankruptcy. The story looks bleak- the days of physical retail are numbered.

Hold that thought, because we have some new players in the game- Alibaba (BABA), Amazon (AMZN), and JD (JD). While most people would instantly associate these brands with online retail, the very companies that are supposedly driving bricks and mortar out of business, we have an interesting fact for you- these are also the most aggressive investors in physical retail. What does this mean? Let’s find out.

The internet promised many things- and indeed, the internet delivered many things. Among these, online retail. In just over twenty years, players like Amazon have gone from an experimental book store, to having a market cap higher than that of Walmart (WMT), Costco (COST), and Home Depo (HD) combined (Despite the massive October selloff). Pretty scary stuff, especially if your business has relied exclusively on a network of physical stores. But here’s the catch- there is something called the Digital Growth Ceiling. You see, as with anything, the internet has its limits, and by extension, this means online growth is not in fact unlimited, but rather slows down past a certain point.

We’re not the only ones to have realized this, and nothing says it better than the actions of our largest online retailers. JD has announced an aggressive plan to open one million of its convenience stores in China over the next five years, which works out to be 1,000 stores per day. This is in addition to Amazon, who are rumored to be planning 3,000 of its own ‘Go” stores over the next few years. The difference between these stores and the ones most traditional retailers operate, comes down to the technology, and thus experience. We’ve said it before- we live in the digital age, where customer expectations have fundamentally shifted. People are looking to purchase products as much as have a positive experience, and this is one key point online retailers really struggle with. Online shopping may be extremely convenient, but there is simply no way for these retailers to replicate the experience which can be provided in a physical format.

Explanations for what is happening in retail tend to fall into two major categories:

1: All retail sales will migrate online, and physical retail will be extinguished, and;

2: Future shoppers will all be heading to giant retail stores like Walmarts and Supercenters.

While significant academic research has taken place to support these theories, from our perspective as a retail experience company, the reality seems to suggest a dual-channel approach will prove most resilient.

As online retailers are rushing into the physical scene, established players already have an advantage- their existing network. Yes, times are changing, and delivering the same old experience simply doesn’t lead to customer retention anymore. This is where high-tech comes in. Companies such as Foodstuffs, and even Walmart, are quickly catching onto the trend of leveraging breaking edge technology to improve their customer experiences.

Here at IMAGR, our core belief is in the retail experience. Customers are faced with a plethora of choice for each imageable product, and it is only the vendors that can offer the most personalized and authentic experience who will win the customer’s loyalty. Products like our SMARTCART achieve an unprecedented level of personalization, whether it is through the time it saves, the satisfaction it brings, or the customized recommendations it offers.

We are incredibly excited to be being SMARTCART to a store in your area soon. Make sure to follow us on social media and watch out for our latest announcements, because once you’ve tried SMARTCART, there is simply no going back.

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