It’s July 16th, the end of another Prime Day where Amazon, the online behemoth, is slated to do nearly $6 billion dollars in sales in just two days. Estimates show that Amazon accounts for anywhere from 38 to 49% of US eCommerce which gives them a commanding lead over second place eBay, which accounts for under 7%.
With the success of prime day and the decline and demise of iconic retailers like Toys ‘R Us and Sears, the apparent conclusion is that retail itself is dead. However, zoom out just a little and you’ll find that despite its dominance in eCommerce, Amazon only represents 5% of the U.S. retail market. That means that brick and mortar, despite all the hype, is still here and will be for quite a while.
Of course as the internet continues to dominate, as logistics continue to improve to deliver on the same day, and as the price advantages of centralized infrastructure continue to play out, that may not always be the case. Retail will need to continue to evolve, and the retailers that offer the best experiences will enjoy greater advantages while the retailers that run warehouse style stores of shelves with little added service will continue to get picked off over time.
I’ve referenced this Gensler study on public spaces before and I believe it holds 2 very interesting pieces of data that show us why traditional retail may always continue to be around and where our opportunity as an industry is to help improve those retail experiences.
65% of people go to a retail store to socialize.
People are 1.4x more likely to have fun at work than they are in a retail store.
Let both of those statements sink in for a moment and start to think about the implications.
Good! The fact that people engage in retail experiences to socialize is huge. It means that there is some other component to shopping outside of procuring items at the best price and getting them quickly. This is why even Amazon is trying different brick and mortar concepts out across the country. The problem is that shopping in the current retail environment is often seen as less fun than going to work. Now there’s an issue… and an opportunity.
I know that many AV professionals scoff at the idea of “experience” as a subjective target, but for the firm that takes the time to figure out the formula, “experience” will be the key to winning the retail market. A 3×3 video wall playing surf videos at the back of the store while the latest Taylor Swift track plays is better than nothing, but that formula has been used in retail for years now, so it’s not exactly exciting the masses.
We live in an era where technology is no longer the hurdle. We have touch, voice, and gesture control. We have low dot pitch LED, projection mapping, and video walls. We have Augmented, Mixed, and Virtual Realities. We have 360 cameras, photoshop, and CG graphics. We have facial recognition, artificial intelligence, and data analytics.
We have everything we need to design and deliver 21st century retail experiences that leverage relevance, create community, and inspire awe. The question is, what are we doing about it?
Retail is not dead and experience is not a buzz word. The question is… who will capitalize on the opportunity?