Commentary

Kagan: Tech titans in retail and why it's time to make shopping fun

Jeff Kagan explains why every retailer should be noticing what some big tech titans are doing with retail and re-think and improve the experience for shoppers.

Photo by iStock.com

April 5, 2019 by Jeff KAGAN — Wireless Analyst, Telecom Industry Analyst

It all started a few short years ago when Apple opened its first retail store. This ushered in a re-thinking of retail. And it was a big success. So, Apple continued to open retail stores around the country.

That nudged Microsoft and Amazon to open their own retail stores in shopping malls. Now Samsung has caught the retail bug and is opening their first three stores. So, which will be the most successful, why and will this new trend grow long-term?

The Apple retail store is a huge success. Every time you walk by one of their stores, they are always busy with customers who are either shopping or getting service work done. There is always a line of customers to wait through.

Apple does a good job of managing this chaos by putting you on a list and texting you a few minutes before your turn. That way you can walk around the shopping mall, and still make it back to the store in time, rather than just sitting there, waiting.

Will Samsung retail stores be successful like Apple?

With Apple's success in retail, I would have expected Samsung to be next in line, quite a long time ago. They were not. Next came Microsoft and Amazon selling their devices. I am not sure if they offer warranty and repair service at all their locations. Maybe that's why these two stores are generally much quieter, with no lines.

Now, Samsung is finally being dragged into the retail environment. How will they model their stores? Is it by choice or do they feel pressured to take this route? Will they be sales only like Amazon, or will they be service as well like Apple? Will they have long lines like Apple, or be quieter like Microsoft?

If they offer a quicker and easier way for customers to shop and get service without having to ship their smartphone away for a week or two while it gets fixed, they could be as successful as Apple. We'll just have to wait and see how they manage this new growth and branding opportunity

Expanding to retail can build a corporate brand

These are not the only companies moving into retail. Comcast Xfinity and Charter Spectrum are two others doing the same thing. This is a good way for customers to experience their pay TV, Internet, telephone and Xfinity Mobile services.

Today, it seems many traditional retailers think customers are lazy. They think customers want a quick and easy way to shop with them. That's why you can order groceries online, stop by the store and have a worker bring your bags to your car. Or even better, order online and have your groceries delivered to your home.

This is similar to what other retailers like Target are doing. They created several spaces out front to have your order brought out to your car while you wait. Walmart is trying something similar. So are many other retailers.

Does this new way of retailing work? Not for the masses who still like walking through the store. This is only successful for a small slice of the retail pie.

Retailers put too much focus on small groups

Then again, retailers often focus too much attention on a small slice of the pie. Think of all the parking spaces that are wasted with signs saying, charge your car here, worker of the week, pregnant shoppers and more. Add these to all the handicapped spaces and the vast numbers of regular shoppers are pushed to the back of the line, having to walk long distances just to get to the front door.

Rewarding one group and penalizing another, larger group makes little sense. Yet, that's what they do.

When it comes to grocery stores, I don't particularly think the average customer wants to have their order delivered. I think this is a smaller slice of the consumer pie.

I believe most people like walking through stores and shopping. Think about it. When walking through a store, then checking out, how many items were on your shopping list and how many other items did you just find while walking up and down the aisle?

Suddenly, you see your favorite ice cream on sale and even though it wasn't on your shopping list, it ends up in your cart. Or while walking around you see something that wasn't on your list, but which you realized you are running low on. So, you pick it up.

Online shopping is costly to grocers

So, letting customers shop online and deliver bags to their car in the parking lot can be costly to retailers who benefit from the customer strolling through the aisles.

Then again, grocers often go too far. Customers hate it when grocers decide to shuffle everything in the store. Why do they do something their customers hate? Simply to get them to walk up and down every aisle to find things they are not thinking of.

Retailers think when a store is familiar enough, customers walk just to the aisle they want, then leave. So, they re-organize the store to increase sales, even though it ticks their customers off.

What is perplexing to me is this. If retailers re-shuffle the store and tick off customers on one hand, why do they make it easier to order online and not even go into the store to go shopping and pick up extra items?

Perhaps they think they have to for competitive reasons. Perhaps they don't want to do this but are afraid they will lose market share to competitors who do this.

Retail leaders should lead, not follow

Leaders should lead. The entire retail industry is changing. It has always been changing. Most of the change we have seen over the last several decades have been good.

Using electronics so customers can pay for their order with their iPhone or Android is a great idea. Self-checkout counters are a great idea.

What grocers should do next to make the shopping experience even easier and simpler. Just like what Amazon is doing with some test stores, when a customer walks into the store, their app on their smartphone logs onto the store network. The shopping cart has bags. The customer shops and puts groceries in the bags. Then simply walks through scanners, which reads what the customer has in their cart, and they simply leave the store.

Next great innovation in retail

No cashier. No lines. No emptying the basket. No ringing everything up.

No bagging everything. Not putting all the bags back into the cart. None of that. Just walk out of the store and let scanners charge your card. Easy as that. That would make life so much easier.

That's a great kind of innovation. That lets the customer walk through the store and by impulse items, not just what's on the list.

The retail industry continues to change. Some of the changes make perfect sense. Some of them make no sense at all. Except for one slice of the consumer pie, there is little customer interest and little benefit to the store, letting customers order online.

Maybe things will be different a decade from now. However, you don't ignore the majority of today's customer's needs for this possible promise of something a decade from now.

So, while this innovation is good and exciting, retailers should instead focus on improving the customer experience, not finding ways to keep customers from entering their store and shopping.

Retailers should take a look at what Apple, Microsoft, Amazon and now Samsung are doing in retail. Re-think and improve the experience for your shoppers. Make the shopping experience fun once again. That will be better for everyone.