Weekly Business Insights from Top Ten Business Magazines | Week 327
Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 327 | December 15-21, 2023
Strategy & Business Model Section 2
Are Everywhere Stores the New Face of Retail?
By David R. Bell | MIT Sloan Management | December 18, 2023
Extractive Summary of the Article | Listen
Nearly 30 years ago, a fledgling startup called Amazon made its first online sale, and a retail revolution began. Dubbed “the Everything Store” by Brad Stone in his book of the same name, Amazon leveraged digital technologies to expand the very nature of retail, demonstrating that selling physical goods no longer required a physical storefront.
But today, the cornerstone of retailing — location — has expanded once again, and the advent of what we call everywhere stores is impacting omnichannel strategy and unlocking potential value for new entrants and incumbents alike.
Retailing excellence demands optimal engagement with customers through experiences, paired with product fulfillment with minimal friction, and historically both have happened in stores. Everywhere store refers to a new kind of retail experience, in which customer engagement and product fulfillment occur in native environments — that is, they are not dependent on purpose-built stores or warehouses. They allow brands and retailers to think much more expansively about where customer interactions should take place and where inventory should be located.
Omnichannel retail comprises four distinct approaches to customer engagement and fulfillment: traditional retail stores; online sales plus physical showrooms where customers can engage with products; online sales with in-store pickup; and pure-play e-commerce, in which both fulfillment and engagement occur online.
The next wave of omnichannel retail is being led by innovators such as Los Angeles-based outdoor furniture brand Outer, which entered the market selling directly to consumers, without establishing physical stores. Outer’s cofounders, Jiake Liu and Terry Lin, saw an opportunity for disaggregated retail: Rather than creating traditional showrooms, they turned customers’ backyards into showrooms. Prospective customers visit the homes of existing customers to experience and engage with products and other customers offline. A key advantage of turning customers’ yards into showrooms is that other people in the neighborhood might be good sales prospects, given that they are likely to share sociodemographic characteristics.
This disaggregated approach to retailing can also serve as a model for a stand-alone business. For example, the venture-backed platform Minoan enables the owners of short-term lodging spaces (such as hotels and Airbnb rentals) to purchase from specific brands, furnish their guest quarters with those brands’ products, and then invite guests to buy those goods while staying at the property.
The tactic might save costs compared with using traditional warehouse space, allow brands to adapt capacity based on demand fluctuations, and place inventory closer to more customers. The latter enables faster delivery by local drivers, in turn potentially enhancing customer experience and saving brands money by avoiding warehousing expenses.
3 key takeaways from the article
- Nearly 30 years ago, a fledgling startup called Amazon made its first online sale, and a retail revolution began. Dubbed “the Everything Store” demonstrating that selling physical goods no longer required a physical storefront. But today, the cornerstone of retailing — location — has expanded once again, and the advent of what we call everywhere stores is impacting omnichannel strategy and unlocking potential value for new entrants and incumbents alike.
- Omnichannel retail comprises four distinct approaches to customer engagement and fulfillment: traditional retail stores; online sales plus physical showrooms where customers can engage with products; online sales with in-store pickup; and pure-play e-commerce, in which both fulfillment and engagement occur online.
- The next wave of omnichannel retail is being led by ideas i.e., selling directly to consumers, without establishing physical stores – by turning customers’ backyards into showrooms and/or warehouse space and enables the owners of short-term lodging spaces to purchase from specific brands then invite guests to buy those goods while staying at the property.
(Copyright lies with the publisher)
Topics: Strategy, Business Model, Retailing, Omnichannel