Why is retail waiting for Amazon to innovate for them?

Originally published on LinkedIn · August 30, 2017

With Amazon’s acquisition of Whole Foods, some are going wild imagining the future. Many are pointing to Amazon Go as the future of retail shopping. But retail didn’t have to wait for Amazon. There are mature technologies readily available to change our lives, designed to make the shopping experience smooth and simple. Why haven’t we, as consumers, experienced them yet? Because the retail industry fell behind on the innovation curve.

What are the most significant recent innovations in retail that you can remember? Can you think of anything beyond self-checkouts? Even those aren’t widespread! With Amazon’s recent purchase of Whole Foods, everyone is expecting the acquisition to accelerate innovation. The problem? That innovation should have been happening long before this acquisition.

While demographic shifts and customer preferences are stacked against retail, the industry is not doing itself any favors by moving slowly in the innovation department.

What could retail have done better? Here’s five innovations they could have (and should have) made since the advent of smartphones.

Self-Service Checkouts with Smart Phones

Imagine you’re going to your local grocery store, Groceries R’ Us. You download the Groceries R’ Us shopping app. As you move around the aisles, you scan the bar codes on the items and press the buy icon on the app before dropping each item in the cart, quickly finishing your shopping and heading straight out the door. The technology needed to do just that is available here and now, and the risk of theft and shoplifting is probably not any worse than a regular checkout process. Can you think of any reason why the retail industry didn’t implement this technology? It has the potential to significantly reduce the number of employees and simplify the shopper experience, boosting revenues AND reducing expenses. That’s a miss.

Store Availability

Like many, I do most of my shopping online. But now that Amazon is collecting tax in every state, the playing field is level with respect to cost. That gives retailers a golden opportunity to sell more in store. Alas, if only the items I wanted were easier to find.

Even for popular items, in-store availability is always a hit-or-miss experience. Imagine punching in three items you want to shop on www.target.com and being able to quickly identify one store where all are available. This should be a core capability of retail websites by now, but it’s still an incredibly frustrating experience to find a bunch of items together.

In-Store GPS

Picture this. You try to find an item in the store. The employees are nowhere to be seen. Now imagine a store app that allows you to enter the product and tells you exactly where the item can be found. Ikea does this (though it isn’t perfect), but most retailers don’t even come close. That technology is within reach today.

Concierge Pickup

Companies have been trying to perfect online grocery shopping and home delivery for years. But there’s a far simpler option. Create a grocery list online for a concierge to pick up, pack up and deliver to your door. There are third-party services in this space now, but among retailers, only Walmart comes anywhere close.

Concierge pickup also allows retailers to have a smaller store footprint with a larger warehouse just behind the store. Stores are expensive to maintain, while warehouse spaces are much cheaper. In this setup, customers can schedule their pickup and retailers can fulfill orders efficiently. Think of it like a local pizza takeout. Smaller storefront than a restaurant, same sized kitchen.

Customer Engagement and Loyalty

If you pause and think for a second, retail has one great advantage that their online counterparts would kill for. Consider the amount of time spent browsing the aisles, the number of times a customer comes back, and the consistency with which they make their return visits. According to the U.S. Department of Agriculture, a typical American family spends anywhere between $146-$289 each week on groceries. That is an astounding number. And according to fmi.org, about 85% of shoppers shop regularly at a single, primary grocery store. But the trends are alarming. Research shows that shoppers are heading to their grocery store out of habit, not loyalty – and they’re consistently discovering other channels to purchase groceries. Grocery chains have a window of opportunity to lock in their customer base, get to know them better, segment them and engender brand loyalty. They’re still struggling to take advantage.

The retail industry is a wasteland of opportunity. And while there are undeniable headwinds that have accelerated the demise of several big-name retail chains, they can’t point the finger at anybody but themselves.

But, as Einstein famously said, "within difficulty lies opportunity." The retail industry should continue to pursue new innovations and revisit the traditional methods of doing business, dynamically evolving to match consumer's constantly shifting demands.

So what if it takes them out of their comfort zone? Given the current retail landscape, that might just be a good thing. Please share your thoughts on this.

Thank you for your time and attention in reading the post.

About Author: Suresh Chaganti, Co-Founder & Strategy advisor at VectorScient. Suresh specializes in Big Data and applying it to solve real world business problems. He brings in 2 decades of experience in architecting B2B and B2C applications across a variety of Industry verticals. Connect with suresh on linkedin