Back in May I wrote here about the emerging trend of Experiential Retail. The momentum towards retail experiences has shown no signs of abating, but a number of developments over the past two weeks or so have shifted the entire foundations of huge segments of the retail ecosystem. So it seemed like a good time to look again at the current state of retail and think a bit about the future of retail.
Of course there was Amazon’s announced purchase of Whole Foods. Despite much speculation from all corners of the media, no one really knows what Jeff Bezos’ plans are for the chain exactly. Perhaps it will use Whole Foods stores as distribution centers. Perhaps they most want Whole Foods’ expertise in grocery or access to their well-heeled customer base. Perhaps they want to add new “primitives” as Ben Thompson of Stratechery posits in his insightful analysis. But it will surely allow Amazon to further impact the grocery business, as it has so many other retail verticals.
A few days after that, and not nearly as widely noticed, was Amazon’s announcement of Prime Wardrobe. In recent years a number of really interesting startups like StitchFix and Trunk Club have risen to prominence. These companies pair you with a stylist who will select clothes for you and send them on a periodic basis. Customers can try them on and return whatever they don’t like, paying only for what they keep. Prime Wardrobe is basically that same experience without the stylist. It’s a relatively risk-free way to try on clothes at home, and could appeal to a broader audience than those looking for stylists. And of course there’s nothing to stop Amazon from hiring stylists for those customers who do want that level of service.
Groceries and fashion are two retail sectors that until recently seemed relatively protected from e-commerce competition. Many grocery items are perishable and vary by item, and can be damaged in shipping, creating plenty of incentives to pick up your own groceries. But judging from the performance of grocery stocks and the generally anguished cry from analysts, traditional grocers are not feeling very safe now. Similarly, trying clothes on is imperative for establishing both fit and fashion. But the ability for any Amazon customer to try clothes on at home before buying them adds yet more pressure to traditional fashion retailers, already under pressure from those aforementioned startups and other changes in customer behavior.
All of these are trends that will likely drive retailers in these sectors further along the road to Experiential Retail. So it reinforces my prior thesis that retail will become increasingly about the experience. But what of technology? There’s been some news on that front as well.
There was the Moby Mart concept store, currently roaming around a parking lot in China. Moby Mart was created by Wheely’s, a Swedish company that sells bicycle-powered coffee cart franchises.
This is an interesting concept, combining the cashier-less payment system of the Amazon Go concept store (which Amazon began prototyping late last year) with the mobility of autonomous vehicles. But it seems a little fanciful and limited as a comprehensive vision of the future of retail. Perhaps the future of newsstands or convenience stores. Or coffee carts?
Back in April, UK startup Farfetch, an e-commerce clothing retailer, unveiled their own Store of the Future concept, firmly anchored around fashion retail. In Farfetch’s vision, as in Amazon’s, data is at the center of the future offline retail experience, just as it is online. This can allow for the same sorts of personalization of the experience that shoppers have come to expect from shopping online.
That’s a reasonable enough vision, one that makes sense to me anyway. But it doesn’t really change the calculus of needing to create an experience in order to compete with online shopping in the first place. So I still maintain that the era of Experiential Shopping is upon us.