The business story of 2017 is the “Retail Apocalypse” and Amazon scaring everyone from Fortune 500s to Mom & Pop stores. However, the Buzzfeed-esque titles aside, the Four Horseman haven’t come for retail yet. Retail still accounted for 89% of the $3.34 Trillion in 2016 total sales and can continue their domination by creating a new strategy, e-tail.
What is E-tail?
E-tail is the blend of retail and e-commerce into one coherent experience instead of sacrificing one for the other. This approach creates a consistent user experience between channels and leverages each channel’s advantages.
How can companies achieve this?
To truly succeed at e-tail, companies will have to win in three areas: crafting a coherent strategy, creating storehouses, and curating in-person experiences.
1. Coherent strategy across channels
Retailers and e-commerce companies are increasingly moving into the other’s channels, highlighted by Amazon’s and Walmart’s recent acquisitions. However, many of these moves seem random and aren’t following a clear strategy. In contrast the best e-tailers will use their company’s value proposition to guide their moves in each channel.
- Good Example- Warby Parker. Their value proposition is to make find fashionable frames fun and easy – online or in person.
- Bad Example- Walmart’s acquisition of Bonobos. Bonobos is a great company but it doesn’t fit into Walmart’s low price, no frills strategy.
- Recommendations – JC Penny should buy Trunk Club, Best Buy should buy Newegg
2. Storehouses > Stores or Warehouses
Great e-tailers will treat their stores like the Navy treats its aircraft carriers. Both are centerpieces in their strategy and used as independent launching pads for other assets. Today that means shipping orders locally for one day delivery, while tomorrow its the base for a same day delivery system.
- Good Example– Target purchasing Grand Junction. This acquisition sets the stage for Target to create a same day delivery network nationally.
- Bad Example– Best Buy. In store pickup isn’t better then free shipping to your house. Also if regional stores have home delivery then national companies can too- especially one with a dedicated car fleet (Geek Squad).
- Recommendations – Walmart and Uber should partner to enable same day delivery in all major metro areas, Big Box Retailers could ship inventory between stores to fit customer needs/convenience.
3. Curating customer experiences
Not only are storehouses the centerpiece logistically, they should also be central in an experiential way. As online shopping continues, stores could be increasingly marginalized to emergency purchases or testing physical products. Instead of letting this happen e-tailers should focus on turning stores into destinations by creating experiences there.
- Good Example- Stein Mart/TJ Maxx. By always changing their clothes it creates an exciting experience and massive incentive to visit their stores.
- Bad Example – Big Box Retailers. Their designs focus on quick shopping will increasingly lose to online shopping or more engaging experiences.
- Stores can offer discounts for buying products in bulk at the store.
- They should create excitement by offering exclusive brands or by constantly changing products.
- Stores should focus on the physical by presenting products to see and try.
- Brands should employ experts to give personalized advice not available online.
- They can create a community -examples include offering computer 101 classes at Best Buy or cooking class at Walmart.
While retailers are currently losing the initiative to e-commerce, they are only destined to lose if they keep playing the same game in ecommerce. If they don’t settle for “just being innovative” and change the game to e-tail they can still win.