Saturday, March 19, 2005
Clicks and Mortar for a Global Village Store
I've been posting about how Form and Functionality evolve together in the context of E-Reading, which may see a revival of scroll reading due to E-Ink on rollable polymer scrolls. How about a return to the village general store? Where you and your needs were known as soon as you entered; and you were guided to bargains and new items that the friendly owner knew might interest you - maybe he even had your regular supplies ready for your visit. Think it's just a fantasy of times past?
Perhaps not, we may be headed for a global version of the village store experience, with potential business opportunities for rural areas, as E-Commerce Gets Smarter (from the April issue of Technology Review) :
"The business jargon for this model of integrated retail sales is “multichanneling”—that is, fusing digital services with in-store, mail-order, and telephone sales, and with any other retail channels. The digerati have called it “clicks and mortar” since the Internet boom of the 1990s. No matter the term, it is now the driving force in retail. For while the Internet works fine for some types of goods—such as books, computer products, and music—many shoppers don’t want to purchase and pay shipping costs for things like canoes, cars, clothes, and entertainment systems without trying them out, trying them on, touching them, or maybe even talking to a knowledgeable salesperson.
New technologies and ideas are allowing retailers to remove the wall between online shopping and in-store shopping, and to make the gathering of customer data both easier and more valuable. Advanced data-mining and Web analytics techniques now examine not just what you bought online but what you viewed, helping retailers design promotions that will entice you to shop online and in stores. These enticements will themselves arrive over multiple channels—through magazines, regular mail, e-mail, the Web, and wireless transmissions to your car or shopping cart."
The end goal of leading-edge retailers is to provide more customized or personal service, on an international basis, using technology to make the connections between customers and sellers. Blending massive information technology functionality with personalized local retail forms for customers. What motivates this? Or, in other words, how big is the market?
"The sales figures for 2004 are in, and e-commerce is on a roll. Online retail spending soared 26 percent last year, to $66.5 billion, according to business analysis and advisory firm Jupiter Research. That’s 4 percent of total retail spending—compared with nothing about 10 years ago, and with 3 percent in 2003. By 2009, Jupiter predicts, online spending will reach 6 percent of total retail sales.But that’s just a small part of the e-commerce story. Last year, another $355 billion in retail sales took place in physical stores after consumers had done their homework online. Overall, says Jupiter, for every $1 consumers spend online, they spend $6 dollars offline as a result of research conducted on the Internet." (Translated, that's 4% plus 24% = 28% now; with 50% growth by 2009, its a potential market of 42% of total retail sales.)
Where is this taking us for personalized general store shoping? A novel approach, by Stop and Shop, which operates 350 supermarkets in the Northeast, is called Shopping Buddy. It consists of a wireless computer and data management system in a paperback- book size device installed in shopping cart handles. It has a simple graphical interface, displaying such features as sale items and a customer favorites list, naming the things the shopper buys most frequently, as well as a map of the store and a suggested route.
"Infrared beacons on the ceiling track the cart’s location, so the device can automatically alert the customer if any of his favorite items are on sale in the aisle he is currently browsing. The interface also lets the shopper wirelessly order cold cuts from the deli; an alert sounds when they are ready. Finally, an attached imaging scanner lets the shopper scan items as he puts them in the cart; as the cart fills, a running total is displayed. When it comes time for checkout, the cashier scans the shopper’s loyalty card, and all of the items in the cart are listed on the register screen. This saves time for both the shopper and the cashier."
Stop and Shop is expanding the program and working on new features, including one allowing customers to create online shopping lists that appear on the Shopping Buddy when they arrive at a store. Looking further ahead, IBM, the developer of the Shopping Buddy technology is
"hoping to better tailor advertisements and promotions, and generally improve the shopping experience. Rakesh Mohan, senior manager of IBM Research’s Industry Solutions group, says there’s no reason such a device can’t suggest a wine to go with a meal or provide dietary guidance by reporting an item’s fat or carbohydrate content. It could even sound a warning if a product that a shopper scanned contained ingredients to which he or she was allergic."
It is all about allowing people to integrate their online and offline environments in useful and time-saving ways that blend form and functionality; oh, yes, and making profits while doing so. So how do we exploit these trends in rural areas where we live at the end of the "long tail'? Well, as any college professor would tell you : "That's an exercise for the Student".
Perhaps not, we may be headed for a global version of the village store experience, with potential business opportunities for rural areas, as E-Commerce Gets Smarter (from the April issue of Technology Review) :
"The business jargon for this model of integrated retail sales is “multichanneling”—that is, fusing digital services with in-store, mail-order, and telephone sales, and with any other retail channels. The digerati have called it “clicks and mortar” since the Internet boom of the 1990s. No matter the term, it is now the driving force in retail. For while the Internet works fine for some types of goods—such as books, computer products, and music—many shoppers don’t want to purchase and pay shipping costs for things like canoes, cars, clothes, and entertainment systems without trying them out, trying them on, touching them, or maybe even talking to a knowledgeable salesperson.
New technologies and ideas are allowing retailers to remove the wall between online shopping and in-store shopping, and to make the gathering of customer data both easier and more valuable. Advanced data-mining and Web analytics techniques now examine not just what you bought online but what you viewed, helping retailers design promotions that will entice you to shop online and in stores. These enticements will themselves arrive over multiple channels—through magazines, regular mail, e-mail, the Web, and wireless transmissions to your car or shopping cart."
The end goal of leading-edge retailers is to provide more customized or personal service, on an international basis, using technology to make the connections between customers and sellers. Blending massive information technology functionality with personalized local retail forms for customers. What motivates this? Or, in other words, how big is the market?
"The sales figures for 2004 are in, and e-commerce is on a roll. Online retail spending soared 26 percent last year, to $66.5 billion, according to business analysis and advisory firm Jupiter Research. That’s 4 percent of total retail spending—compared with nothing about 10 years ago, and with 3 percent in 2003. By 2009, Jupiter predicts, online spending will reach 6 percent of total retail sales.But that’s just a small part of the e-commerce story. Last year, another $355 billion in retail sales took place in physical stores after consumers had done their homework online. Overall, says Jupiter, for every $1 consumers spend online, they spend $6 dollars offline as a result of research conducted on the Internet." (Translated, that's 4% plus 24% = 28% now; with 50% growth by 2009, its a potential market of 42% of total retail sales.)
Where is this taking us for personalized general store shoping? A novel approach, by Stop and Shop, which operates 350 supermarkets in the Northeast, is called Shopping Buddy. It consists of a wireless computer and data management system in a paperback- book size device installed in shopping cart handles. It has a simple graphical interface, displaying such features as sale items and a customer favorites list, naming the things the shopper buys most frequently, as well as a map of the store and a suggested route.
"Infrared beacons on the ceiling track the cart’s location, so the device can automatically alert the customer if any of his favorite items are on sale in the aisle he is currently browsing. The interface also lets the shopper wirelessly order cold cuts from the deli; an alert sounds when they are ready. Finally, an attached imaging scanner lets the shopper scan items as he puts them in the cart; as the cart fills, a running total is displayed. When it comes time for checkout, the cashier scans the shopper’s loyalty card, and all of the items in the cart are listed on the register screen. This saves time for both the shopper and the cashier."
Stop and Shop is expanding the program and working on new features, including one allowing customers to create online shopping lists that appear on the Shopping Buddy when they arrive at a store. Looking further ahead, IBM, the developer of the Shopping Buddy technology is
"hoping to better tailor advertisements and promotions, and generally improve the shopping experience. Rakesh Mohan, senior manager of IBM Research’s Industry Solutions group, says there’s no reason such a device can’t suggest a wine to go with a meal or provide dietary guidance by reporting an item’s fat or carbohydrate content. It could even sound a warning if a product that a shopper scanned contained ingredients to which he or she was allergic."
It is all about allowing people to integrate their online and offline environments in useful and time-saving ways that blend form and functionality; oh, yes, and making profits while doing so. So how do we exploit these trends in rural areas where we live at the end of the "long tail'? Well, as any college professor would tell you : "That's an exercise for the Student".
