RSR Research: Macy's Returns to Selling Electronics, Customer-Centric Store Style
Through a special arrangement, what follows is an excerpt of a current article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
Macy's announced plans to outfit at least 250 more stores with e-Spots: in-store kiosks dedicated to selling branded consumer electronic items without requiring a (knowledgeable or otherwise) store associate to assist in the purchase. This follows what was clearly a successful two-year test in 180 stores and will bring to 400 the total number of e-Spots in Macy's stores. It also marks the retailer's return to consumer electronics.
Here's how it works. The kiosks are manufactured (and sales are tracked) by San Francisco-based Zoomsystems. Once at the kiosk, customers use a touch screen to shop for products in an interface similar to eChannel shopping. Once selected, they swipe their credit card, and a robotic arm (ala penny arcade) selects and dispenses the product.
There are a couple of factors that make this story compelling. First, there is the sizeable profit Macy's envisions. Zoom estimates that the average "vending machine" pulls in $360 a month, while mall retailers average $330 per square foot on average. By way of comparison, Zoomshops claim to provide between $3,000 and $10,000 per square foot in mall-based locations.
But just as important, the decision shows that Macy's understands its customers - and its core competencies. Why wouldn't a consumer want to purchase a new iPod for the gym that color coordinates to the workout clothes, travel bag, and coat she just purchased? And why wouldn't she want to buy it in a simple and entertaining fashion? But would a Macy's employee be the best person to answer questions she has regarding the differences between the 2GB Shuffle at $69 and the 4GB Nano at $149?
By offering a (slightly whimsical) self-service kiosk to its customers, Macy's clearly understands the answer to this last question as "no," and that to dedicate consumer electronics training to its staff would be an inefficient use of resources. The move is a clever way to enhance product mix, while greatly reducing the risk of "shifting gears." Perhaps the retailer will gain more market share of consumer electronics from impulse buys, but it won't ask its employees to play where they can't. And that's what true Customer-Centric Store thinking is all about.
Discussion Questions: What do you think of Macy's getting back into consumer electronics? Are self-service kiosks an answer to the challenges of providing adequate customer service to a category such as consumer electronics? What other categories could e-Spots work for?