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The Store Is Media And Media Is The Store

Posted April 20, 2013
Posted in Advertising, Blog, Branding, Mobile Marketing, Store Experience, Technology, The Future, Trends

PLAY.001

By Doug Stephens

There’s a dramatic and strangely under-editorialized reality taking shape in retail.  One that seems to be eluding even some of the industry’s most sophisticated retailers and brands.

It’s that until very recently the primary function, form and purpose of retail stores was to distribute products. Stores were the principle and in many cases the only means of availing distribution of products to a given market.

Consequently, the entire retail industry framework has been based on product sales from the store to the consumer, and the revenue it generates.  Markets are planned by projecting store sales, retail leases are often based on store sales, and a retailer’s health and success is measured by tracking it on a same-store sales basis. Indeed, almost all in-store metrics of performance are based on sales (per square foot, per hour, per sales associate and so on)  It’s all about the sale of product.

And therein lies a problem.

 

In a post-Internet, post-mobile world of one click access, the distribution of products has all but ceased to be the issue. When one of something can be efficiently shipped to anyone, anywhere, the question of where the sale takes place is rapidly becoming moot.  In other words, in the long-term, sales of product simply can’t be the primary strategic purpose or metric for the store.

Some of the world’s largest retailers are struggling with this jarring reality already. “Stack it high and watch it fly” has abruptly turned into “stack it low and hope it goes” as big box stores scramble to lower inventories in the face of flat or declining sales.  The knee-jerk reaction among some is to simply downsize and marginalize the role of the store.  Others are adopting the buzzword of omni-channel – resigning to the idea that all channels now act as one – which I would argue risks oversimplifying what’s really happening.

You see, what’s actually evolving is a new and far more complex role for the store, and online brands like Google, Bonobos and Warby Parker are affirming it, as they each embark on creating their own, branded, physical stores.  They along with a growing number of other online pure-plays recognize that in order to “fully actualize” their brands, they need to animate a physical presence and visceral experience for their consumers, not to move products but more critically, to move hearts and minds – to sell the idea, essence and values of the brand  – all of which has more traditionally been viewed as the role of media.  Which brings us to a critical point.

The physical store is becoming media.

 

What used to be a distribution channel is becoming a media channel and likewise, media channels (television, magazines, radio, print advertising, social media etc.) are increasingly becoming the “store”.  Virtual storefronts are cropping up in all forms of media. It’s entirely possible to buy products from a tweet, a Facebook post, a video or TV show.  And each day, new integrations and applications are allowing us to buy, in a friction-free way, directly from media formats. Media is no longer merely a benign messaging vehicle but also an instant distribution channel.  We need no longer rely on driving consumers to “the store” when we can now drive the store to the consumer – wherever and whenever they need that store to be.

So increasingly, the primary role of the store will not be to sell product but rather to deliver the most powerful, and emotionally galvanizing experience possible, to create an essential level brand affinity, trust and allegiance – none of which necessarily results in immediate, or location-specific revenue recognition.

It’s not that stores won’t sell products…

 

Of course, many will.  But unlike today, where retail is a product-first, experience-second business, the reverse will increasingly be true.  Product sales will simply ride on the back of remarkable experiences.  Consequently, sales in general will steadily become a less meaningful or accurate measure of true store contribution and productivity.  On the flip-side, media, which has always gotten away with using nebulous metrics, will now be held to entirely new standards for generating immediate, measurable sales – not merely impressions, “eyeballs” or awareness.

So, the binary debate over which channels are winning and which are losing Get-My-Book.001should come to an end.  The fact is, all retail – online and offline – is becoming phy-gital.  The physical store is becoming a powerful media channel and increasingly all forms of media  are becoming the store.  The result must be nothing other than a revolution in the way we plan, build, lease, measure and analyze the value of retail stores.

The store as we’ve known it, is being reinvented.

 

 

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COMMENTS

  • Ken Lonyai  says:

    Doug – how many times can I agree with you?

    Definitely correct. The mechanism is clearly giving way to the experience and the early days of segmented aspects of brand/retail/fulfillment are blending to create a consumer experience, that is ultimately brand-centric. We see Amazon, Google, PayPal, and others reaching into the physical world and retailers like Macys and Walmart acting like distribution centers. It’s all going to circle-in on a user-centric experience that transcends place.

    Reply
    • Doug Stephens

      Doug Stephens  says:

      Exciting times for sure Ken! Thanks for the comment.

      Reply
  • David Zahn  says:

    Stores definitely need to compete differently and should be focusing on “experience” over simply being a repository of products. I think that the analogy of store as classroom or even library may fit. An opportunity to learn more about potentials, engage or interact with others (peers and experts), a way to measure one’s own development and progress, etc. are embedded in the store’s potential – it just waits to be culled out. EXCELLENT article!

    Reply
    • Doug Stephens

      Doug Stephens  says:

      Thanks for the comment David!

      Reply
  • Dean Rubin  says:

    Outstanding articulation of retail transformation. Interestingly, supermarkets, pharmacies, and gas stations (to name a few) are retailers that aren’t subject to the changing landscape as we will always need to visit their locales to pick up goods we need immediately (the number of folks that purchase groceries online will be insignificant). Yet these retailers work equally hard at improving their respective experiential landscapes to be preferred over their competition.

    The one aspect that seems to be lost in the latest hooplah about experiential shopping is the value (or perhaps lack thereof) of in-store customer service. Perhaps it has simply become the ante.

    Great article.

    Reply
    • Doug Stephens

      Doug Stephens  says:

      I’m not writing off online grocery just yet Dean. Once 80 million Baby Boomers lose their driver’s licenses, I suspect the online grocery market will thrive. And as for pharmacy, We’re even seeing the transformation there too. CVS and Walgreens have both launched virtual store initiatives and made efforts to create a more experiential store environment.. Gas stations, I’ll concede but then again, in the grander scheme, how long will we need gas stations anyway?

      Reply
  • ReallyOrganizedNow(RON)  says:

    Aaaaah! Art imitating life. Retail business is, like society multi-everything. Roles and functions and values are constantly being redefined. In a world where “you are the brand” and wherein a cat and a piano can get more attention than any well-rehearsed, multi-million dollar Broadway production, there is a clear indication that consumers want personality and experience. We buy image. We buy WOW! We want to be entertained at every turn and at any cost. Very interesting article Ed.

    Reply
  • Peter Reynolds  says:

    How do you think the retail revenue model will change? Traditionally retailers earn a margin which leans heavily on sales volume. If the outlet role is changing to experience, library, education, how will the owner of the physical store earn money?

    Reply
    • Doug Stephens

      Doug Stephens  says:

      Great question Peter. As more and more sales that would have taken place in the store migrate to mobile, online and other channels, it’s safe to assume that a percentage of sales at the location will make less and less sense as a mechanism for rental value. On the flip-side, true traffic levels to a property, aggregate information about what kind of consumers make up that traffic will become increasingly measurable as mobile and big data become increasingly pervasive. So, it’s conceivable that just as TV networks today charge a fixed ad rate based on the buying power of the potential audience certain programming slots, property owners will do the same for retailers in certain physical spaces -all based on more precisely measured traffic levels, number of impressions etc.
      The funny thing is, I do see the % of sales model moving over to media, where advertisers will begin paying based not on impressions or reach but on measurable sales. In fact, this model is already being used by some media agencies. So the way we sold advertising will become the way we lease retail space and vice versa.

      Reply
  • Lina Arseneault  says:

    Excellent post as always. Since the lead in image to your post is part of the content and the ideas it conveys, why a “play button” symbol on the shopping cart if it’s not linked to anything? @LinaArseneault

    Reply
    • Doug Stephens

      Doug Stephens  says:

      We just wanted something symbolic of the store and media being one and the same Lina.

      Reply
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