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Retail And The Economics Of Boredom

Posted February 9, 2016
Posted in Blog, Internet of Things, Shopper Marketing, Store Experience, Technology, The Future, Trends

Image 2016-02-09 at 5.52 PM

By Doug Stephens

Today’s retailers face a tsunami of problems but none, in my opinion is more deadly than the pandemic of sheer consumer boredom that shoppers are being subjected to. Most retail is just painfully boring. In fact, the majority of store chains, malls and shopping centers have become beacons of boredom, monuments to mediocrity and havens of ho hum.


There are a couple of reasons for this.


To understand why this is happening, you only have to put yourself in the shoes of a category buyer for Macy’s. What is the number one criteria that you, as that buyer, would place above all else when reviewing products to bring into your stores? Sales of course. Because unless a product will sell in significant numbers, it won’t justify the square footage it occupies. And it is for that one single reason – anticipated square foot sales volume – that a plethora of unique, fun, fashionable and fascinating products will likely never see the light of day on the sales floor.

Now, repeat the Macy’s buyer mandate across the thousands and thousands of retail buyers, each of whom follow the same essential rule, and soon every store in the mall begins to look the same.   Every mall looks vaguely like the next. And voila…mass boredom!

Exacerbating this phenomenon is the fact that our expectations of variety, selection and discovery are being pervasively shaped by the endless sea of products available online. Online marketplaces like Amazon, Alibaba, Etsy and throngs of pure-play specialty merchants provide shoppers with the ability to search, discover and learn about an abundance of new and interesting products. Online sellers can do this, of course, because they don’t have to stock a thousand of something if they only sell ten of them. They can still carry the item, without tying up massive amounts of capital and floor space. Consequently, online is where you’re likely to spot the next cool, new product. Not in a store.


The Economics of Retail Are Broken


At the heart of all this brick and mortar boredom, lies an outmoded model for how retailers make money. The wholesale to retail model by definition discourages risk. The commitment to per square foot volume of sales as a primary metric of success becomes a straightjacket that impedes any creativity or adventure on the part of a buyer.


The Store As Media


To escape this moribund state, retailers will have little choice but to move to a new economic model. One that depends less on volume sales and more on the volume of positive shopping experiences. As I’ve written in the past, this new model will, as I envision it, be far more like a media revenue model than a typical wholesale to retail buying agreement. In essence, the store itself ceases to operate solely as a distribution vehicle for product but also, and perhaps more importantly becomes a media channel for consumer experiences. Physical stores become interactive media environments where brands can communicate their unique stories, consumers can have immersive interactions with products and all this activity is measured and quantified in real time.

A prime example of this is the Palo Alto based b8ta, a new internet of things store and brainchild of four ex Nest employees. b8ta defies conventional retail paradigms by purely stocking those products its owners find compelling or intriguing. The store may or may not sell a given item and if it does, it may only collect a small consignment fee per sale. Instead it charges brands – established brands and startups alike – rent for the space their product occupies. In addition to exposure for the product, brands and manufacturers are given access to immediate feedback on both sales and customer interactions with their products.

Unlike Best Buy, that sets out to first sell things and then attempts (often in vain) to be interesting while they do it, b8ta works to be interesting first, and uses that quality to drive their revenue model.  GET MY BOOK.001

As I see it, unless retail solves its boredom problem nothing else matters – mobile, omni-channel, beacons – none of it will make any difference whatsoever. Unless retailers can extricate themselves from the tyranny of per-square-foot decision making, and build stores that customers love visiting, all other efforts, initiatives and investments will be in vain.

The bottom line is that In a world where three taps on a piece of glass gets me anything I want, there’s simply no more room for boring stores.


  • Andy Cavallini  says:

    Thank you for your Post, it’s very valuable.

    Any suggestion regarding how to quantify “positive shopping experience level”?
    Being qualitative, it’s very difficult to measure, isn’t it?

    Thank you for your comment,

    Andy Cavallini

    • Doug Stephens

      Doug Stephens  says:

      Good question Andy! It’s hardly something we could look at as an exact science at this point. The first step is to deploy technologies that enable an understanding of the store environment in real time. Video analytics, heat mapping,mobile ID tracking, anonymous facial recognition etc. While these won’t give a quantifiable view of the store experience, they will at least lead to an understanding of who the audience is, where they’re travelling in the store, what and whom they’re interacting with and how long they’re staying on site. Much like a website, the retailer can gain a general sense of the performance of various elements of the store.

      But ultimately, the key is to connect visits to sales, across channels. This is where it gets trickier and where retailers need to deliver more value and build trust.

      The first important step is to reconsider the approach to data in the store environment. Retailers tend to look for opportunities to push – be it coupons, offers or promotions – all of which, consumers are most often unwilling to exchange their identity for. In fact, one study found that 91% of consumers resented retailers who attempt to capture personal data through coupon usage. Instead, retailers need to consider how they can use technology to pull consumers through the experience, giving them things of true and present value, beyond mere discounts. Things like personalized shopping experiences, concierge levels of service, key tools or pieces of information to better inform their shopping trip or things that simply make the store more fun and enchanting. Then use these points to get customers to willingly declare their identities and approval for data to be gathered. Starbucks does a great job of this through their loyalty and payment app. Once customers are bought in, and can see the value they get in return for transparency, retailers will be better able to develop a single view of a shopper, connect visits to purchases across channels and therefore begin to quantify the store experience in a meaningful and verifiable way.

      The key component is not the technology. We already have all that. It’s that retailers come through with delivering a truly valuable experience that consumers are willing and happy to make an even trade of data for. That’s the tough bit.

  • Kathryn Edwards  says:

    Thank you for your commentary….I thought it was just me who is literally bored out of my mind any time I finally force myself to walk into a store, attempting to improve my aging wardrobe. Let’s start by eliminating sparkle and spangle on every item, and go back to primary colors for at least one season. Muted tones and all black have completely taken over everyone’s wardrobe. I’d love some fashionable work clothes for the majority of us who actually have to go to work everyday. The Kardashians are NOT fashion experts.

  • Anne Chung  says:

    Boring. My sentiments exactly. Each time I am dragged into a store, I feel sleepy. The colors are dark, blue or black. The styles are not trendy and doesn’t evoke any excitement. I’ve stopped shopping at malls for years and will not return anytime soon.

  • Store experience is ick  says:

    Is the boredom also a part of every retailer trying to get $ from everyone- regular size, plus size, accessories, kids, teens, tweens, Millenials, Boomers, etc. A store like Macys has vast floor space of stuff, but nothing is merchandised as exclusive or needed now. You know the same stuff is going to be there for months- on the rack, on the floor, spewed across dressing rooms. It’s just “stuff” and looks like the landfill where all the unsold items will end up.


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