Costco really needs to cut its long lines to be more competitive because Amazon is winning on convenience. Last week Forbes reported that 64 percent of American household (about 80 million) now have Prime membership. That's catching up to the number of members Costco has (about 88 million members) globally!
One of the main reasons for Amazon's rise is the changing demographics. The 2015 US Census shows that 53 percent of Americans are single. With smaller and smaller family units, convenience matters more than buying cheap in bulk.
Just as Amazon dabbled in the grocery industry with Amazon Fresh before coming offline, I think Amazon Wardrobe is a precursor to Amazon fashion stores down the road. There's something extra personal about fashion and food that means that the convenience of home delivery will not be able to completely eradicate the fun of going shopping.
The retailers that are actively communicating with their shoppers via mobile are currently collecting feedback via mobile. Full disclosure: we make line-free mobile checkout applications for retailers. One of the most popular features for both shopper and retailer is the ability to leave instant feedback directly at the end of their trip. We see this as a trend that will continue to grow. The more retailers are comfortable with their mobile platforms and the more shoppers are using their smartphones to engage with the retailers, the more we will see shoppers using mobile to provide direct feedback.
Similar to Pandora with music, Netflix is looking to solve a yes/no question -- "should we recommend more movies like this one?" so a binary rating makes perfect sense for them.
Most retailers also want to know more complicated questions such as: "How did customers enjoy shopping at my store compared to their experience at a competitor's store?" Or "Is the shopper's experience at my store improving over time?" A scaled rating system (like the five-star rating system) is a much better way to answer those questions.
Remove the distraction of the social media aspect and the research will likely still find similar results. Personal recommendation from people we know (assuming we like and trust that person's recommendations) carries a lot more weight than a commercial advertisement (especially when people are paying to turn off ads nowadays). At the end of the day, it comes down to the core product -- is it cool, good, neat enough for people to notice, for people to buy and also for people to share/recommend. A lot of the time a marketing campaign (social media or not) takes off because the product is really desirable. The exact same promotion on another less-attractive product can generate completely different results.
Shoppers want both convenience and service made available to them. The future of retail will be a hybrid of both technology and service solutions. Technology could speed up some of the repetitive tasks, such as information look up or checkout speed. The much more valuable human touch includes the unique ability for associates to interpret and adjust to different situations instantly (i.e., is the shopper in a rush and do not want to be bothered? Or is the shopper looking at a wall of items trying to decide which one is best and would like a recommendation?). For example, California Fresh Market grocery store in Pismo and San Luis Obispo have both the latest technology (line-free mobile checkout) and some of the best services (they trained associates to be product specialists -- wine and vitamin consultants) -- providing their customers the best of both worlds.
It's the experience of the entire airport, not just the shopping center. Many of the top international airports work hard to provide a nice customer experience. For example, Hong Kong International Airport had a "Smiles at the Airport" campaign that includes a "Best Smiling Customer Service" competition. It makes a difference. Every guest is welcomed like a potential customer, from check-in through security. As a result, people are a lot more likely to be in a happy shopping mood while waiting for their planes.
In U.S. airports there's often a feeling that no one wants to be there. Customers and workers are all rushing to get in and out as quickly as possible to their actual destination -- not creating the best atmosphere for people to relax and want to spend extra money shopping. I bet even a small upgrade to the happiness and friendliness level of their staff would be enough to make a tangible difference in airport sales.
Wearable tech/fashion has been difficult to sustain beyond a temporary fad because it's not fashionable enough for those that care about fashion nor is it tech enough for those who love tech. Between the two groups, since tech is supposed to be the highlight of these new wearables, I'd pick the tech group to focus on first. It's much easier dressing up a technology to suit a wider market once the technology has been accepted than the other way around.
Walmart is accelerating its online presence just as Amazon is starting to come offline. When Walmart pushed free two-day shipping (with no membership fee) it was a direct move to compete with Amazon online. The acquisition of online fashion brands are no exception. Amazon brought Zappos, Jet.com brought ShoeBuy. Amazon started eyeing fashion acquisitions (e.g. American Apparel earlier this year); Walmart acquired ModCloth to add to their online portfolio.
It's a competition between two giants for both online and off-line dominance. I anticipate both companies will be pushing for more technology and more acquisitions in a race to brand themselves as the default "one-stop" shopping center for most consumers.
As successful as e-commerce is,about 95 percent of business is still done in traditional retail stores. As data-driven as Amazon is, it's not a surprise that the online giant is coming off-line too. While they may not have much direct grocery experience, with what they've learned from working with grocers via Amazon Fresh and their years of online training on what customers like, Amazon have a huge efficiency advantage that could catch them up pretty quickly. Given that their core competency is technology (e.g. line-free checkout with Amazon Go) and delivery (e.g. the new AmazonFresh), Amazon is a competitive contender in grocery retail.
Amazon coming into the grocery space will shift consumers' expectation of grocery shopping even more. Competition in grocery will extend beyond price and quality into customer experience and convenience, too.
Amazon is taking the lead in many ways -- Prime membership and free shipping, coming offline with Amazon Go and now spreading into more client bases with multiple languages. Every move Amazon makes captures a lot of attention from others, too.
My prediction: Walmart will quickly follow with Spanish on their page. As soon as that happens, many other websites will follow in expanding their customer outreach.
Fearless Girl is not waiting for a man to approve and appoint her on a board. She's challenging the "Bull" directly. She's establishing her own grounds, head to head, on an even playing field. The fastest way for anyone to become a CEO/President is to start her or his own company.
Customers shop with a purpose, to buy things. While shopping can be fun, retailers can never outcompete the entertainment industry. If AR and AI in a retail app is just a gimmick then it'll last a few seconds because of the "cool" factor but will not be sustainable (especially if it drains extra battery life). If the AR and AI in the apps are actually useful in improving the shopping experience, then there'll be a chance for shopper adoption. In the near future, I see staff using their mobile device with AR and AI to help enhance customer service (like showcasing their product) more so than customers downloading a retailer's app just to use the AR/AI features.
The goal should not be satisfying every customer with VIP treatment of free shipping both ways -- that's not sustainable.
The goal should be winning loyal shoppers and reward the VIP customers with a differentiated shopping experience. Amazon has a good model here: yearly subscription fee (Prime Member) with the option of free shipping. It builds loyalty (Consumer Intelligence Research estimates that there are about 63 million prime members as of 2016), and it gives their best customers the instant gratification of free shipping. The win-win scenarios will be the most successful models.
VR/AR shopping technology may be better suited for buyers to try in a showroom to review a new collection instead of for the endusers. It is cool but does not add enough convenience (e.g., you still have to set up, put on an expensive VR headset, clear space so you don't run into things, load the right file before getting inside the proper VR demo room) or savings (VR is expensive and it will take a long time for there to be enough users to incentivize brands to add in discounts for the VR experience) to disrupt physical stores. I see VR making a lot more of an impact in games, art, education (imagine learning about the solar system while going there!), real estate and event promotion industries long before it will significantly impact the general retail space.