The Future of Retail
Increasingly I find people are going into stores with no intention of actually buying anything. They are going to stores to touch, try and ask questions about a product in person then jot down the description of the ones they plan to buy.. so they can go online to purchase it for less $ and have it sent directly to them. A trend like this which provides so much benefit to consumers is likely to grow, even at the detriment of retail stores.
What if stores just stopped holding inventory or distributing physical products all together? By taking the ‘Experience Store' concept to the next level, stores could still offer an opportunity for customers to come in, look at sunglasses, try them on, ask if they float - and if they like them, they could even complete the transaction in the store (or opt to have the product info emailed). In this model, no products ever enter or leave the actual store.Instead of making profits from selling inventory, they would make money by leasing space directly to manufacturers who want to drive awareness and get products into consumers' hands. Orders placed in the store could be referred directly to fulfillment centers managed directly by manufacturers.
Why stores might love this..
> they save a great deal of space that would otherwise be taken up by inventory/ stock rooms- allowing them to offer more product variety
> they would no longer have to worry about the risks of managing (theft, loss, damage, returns) / forecasting (overstocking or stocking out) inventory
Why manufacturers might love this..
>By side stepping the need to sell their products wholesale (typically 1/2 the retail price) to store fronts, they will be able to reap much much higher profitability by selling directly to the customer
>getting closer to the end consumer means they will be able to ramp up, cut or tweak production faster
Why consumers might love this..
>More product variety in stores
>Since stores will need a much smaller margin to cover their overhead (as they no longer carry inventory costs) the end price to consumers could be significantly lowered
>since inventory management is no longer necessary, stores could focus more on service and product knowledge.. meaning better customer experiences
> less shopping bags! :-)
Despite all the pro's there are still potential drawbacks to this strategy…
> It completely disrupts the way traditional distribution systems have been built, meaning lots of upfront $$ will be required to perfect it
>there are those times when we all like to have products immediately, in which case this system would not cut it.
..To name a few..
I'm relatively new to e-commerce and have limited exposure to retail, so it's likely that I'm missing some important stuff. I would you love you hear your thoughts / suggestions on this concept.