Thursday, February 18, 2016

#page462 No, I am not smarter than Robert Scoble - or Matt

Way back in 2013, I wrote a post entitled "#page462 What will the company that replaces Walmart (and Amazon) look like?" In short, I proposed that such a store would have zero inventory costs and minimal employee costs - the store would essentially be a brand, and the product people would provide the inventory and the sales staff.

Kind of like Uber, when you think of it.

Of course, because the post is over two years old, some of the statements in the post are already woefully out of date.

What if we had a company that could do the business that Walmart did, but with a lot less employees and with no inventory - AND could do it by maintaining brick-and-mortar stores where people could walk in and IMMEDIATELY purchase products, unlike Amazon where you might have to wait a day (or longer) to get your stuff?

Apparently I hadn't considered same-day delivery.

Fast forward to the near-present. First, Matt recently provided a comment on my original post, which I am reproducing in full:

Um...that is already done in most grocery stores. The vendors pay for shelf space, salesmen come in and order the product, delivery guys bring it in and stick it in the back, some other people stock the shelves. Want an end cap? Thats gonna cost you. What your product on the head (rather than the tail) end of the aisle? Thats gonna cost you. Wanna drop a pallet in the center aisle for a big sale? Give us a better price and we'll keep the extra. I did that myself for a pop company. Granted, the store pays for the products, but the vendors stock it, and take it off the trucks. When I worked in the stores, there was pop/soda guys, pizza guys, chip guys, bread guys, cracker/cookie guys, magazine guys, greeting card guys, coffee guys, and even feminine products guys (though I rarely saw him...apparently he only comes around about this time of the month).

The only real difference between your example and what actually happens is:
1. the vendors are only in the store for a couple hours a day
2. the store is billed for the product, but it may actually sell before its paid for

Second, Robert Scoble posted something on Amazon Pulse. I won't reprint the whole thing, but here's a relevant excerpt:

This week I visited a retail store of the future in downtown Palo Alto called B8ta. Not only is it the first store where you can test bleeding edge products like the new Avegant Glyph, but it’s quite unusual in its open use of cameras to study customers in new ways, and its open adoption of “showrooming.”

What’s showrooming? That’s where customers come in, physically check out a product and then buy that product online for a cheaper price.

B8ta has turned that business model around. Manufacturers like Avegant pay a slotting fee of around $1,000 a month for a small display area. That way the store is pretty profitable even if it never sells a product, but of course, sales are great.

Note that B8ta has some differences from my "Empoprisorium" - in Scoble's world, you would actually leave the store (or go to your phone) to make the purchase - but it still includes the concept (described by Matt) of vendors paying for shelf space.

What's clear is that - at least at present - vertically aligned businesses are passé. A bunch of different companies get involved in the store - or in the car that picks you up and takes you somewhere.

P.S. Relevant to my day job, this part of Scoble's post caught my eye:

Each display also has a camera over it that’s studying customer behavior. Right now they’re most interested in dwell time, or how long each customer hangs out in front of specific products. They use that to understand how interesting each product is and what percentage of the time someone will transact.

I have no idea whether the technology used by B8ta is actually IDENTIFYING the individuals - or at least tracking to see if Unknown Customer A goes from Display A, pops up at Display B a couple of minutes later, and then pops up at Display C a few minutes after that.
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