MBS Systems Sales Consultant, Patrick Cervenik sat down with us to discuss the changes happening in the retail industry, and how college stores can stay adaptable to the transitioning environment.
What are the biggest changes in retail?
A couple years ago, “omnichannel retail” was the buzzword. Now, it is the standard way of doing retail. It is just something that if you aren’t doing it, you are being left behind. The three phrases that I heard over and over again at the Toshiba LEAD symposium — a three-day event centered on retail and new technology — were: Enriched shopping experience, actionable insight and frictionless checkout.
What are some of the changes happening with checkout?
Checkout is where the biggest changes are occurring. It is moving from walking into a store with rows of checkout lanes or buying merchandise online and having it shipped to you, to stores being able to ring up customers anywhere. People will still walk in, get their item and go through the line to check out. But, we are seeing more self-checkouts. Or, store associates walk around with handhelds checking customers out. Even more than that, some stores are offering customers the ability to grab an item off the shelf, checkout from their phone and then just leave the store. Click and connect comes into play with customers buying items online and then picking their purchases up in the store. All of these new checkout options give customers the ability to get in and out of the store as fast as possible.
What it boils down to, and this is especially true for our college store partners, is you have an advantage over Amazon by being on campus. You know your customers better than anyone else. These things put you in the position to provide an experience that is enjoyable.
Why is it important for stores to embrace in-store and online retail?
Generation Z (up to 19 years old) represents about $40 billion in spending power, and students have grown up with a smartphone in their hands at all times. This is the first generation where this is true, and they are the college store’s main customer. They are using their phones to browse, research and compare products. What’s funny is compared to the previous generation, Generation Z prefers to make their purchase, or pick up, in a brick-and-mortar store. Good news for all of us! However, an omnichannel shopping experience is expected, and if you’re not offering one, the shopper may go elsewhere. Stores can’t view online sales and in-store sales differently. It’s really just sales. If you are on the type of campus where your students aren’t shifting to online, then stick with what you are doing. Take a look at how your constumers are behaving and adapt to that.
Why is Amazon on everyone’s mind?
Amazon is the 600-pound gorilla in the room and continues to expand into new markets and product lines every day. They are disrupting every vertical out there: clothing, electronics, and even now grocery. With their size comes an unprecedented ability to spend on innovation. The mainline retailers are starting to feel pressure as Amazon expands to brick-and-mortar. Everybody is trying to figure out how to compete and provide like-services. The positive thing that comes from the Amazon discussion is that they aren’t staying online only. We are seeing them get into brick-and-mortar which is a validation.
Where is the retail market headed?
Stores need a strong online presence. They need to promote their textbook reservations, and do things like price comparison and competitively price their textbooks to stack up against the online sellers. Offer frictionless checkout with the use of mobile or multiple checkout stations throughout the store, so students won’t have to wait in line. The big thing is instant gratification.
Where I see the market headed is there’s always going to be a need for brick-and-mortar. Brick-and-mortar stores aren’t going to disappear in favor of online selling only — that’s unrealistic. Sales online will continue to grow, but so will the need for instant gratification — especially with Generation Z.
I also think we’re going to see a continued shift away from rows or banks of traditional checkouts to checkout points throughout the store — whether that be from an associate’s handheld, a self-checkout kiosk, or a shopper finding what she needs and checking herself out from her phone.
What is “click and collect”? How can stores leverage their location to offer customers a better experience?
Click and collect is where you make a purchase online and pick it up in the store. Online orders and in-store pickup are absolutely something that college stores need to offer year-round. The quicker you can have the pickup ready, the better. Your customers are on campus daily, and foot traffic is critical to brick-and-mortar success. If a student makes a purchase online and comes to the store to pick it up, chances are he’ll see something else he wants while there.
What are the best areas for stores to invest in moving forward?
In one of the sessions at the Toshiba LEAD symposium in Orlando, there was a phrase that stuck — we are not in a “retailpocolypse,” we are in a transformative period.
It’s getting past the fear of doing things differently and adapting some of the new technologies and new trends that push the envelope with the way things are done. The biggest fear that comes up with stuff like scan-and-go technology is shrinkage and theft. What we heard is that it’s not the problem it is perceived to be. Whether it be Sam’s Club or any of the retailers doing things like that, if they had a case where something left the door that wasn’t checked out, it was usually customer error and not malicious intent.
Amazon spends $15 billion a year on innovation. That’s a staggering number and certainly not one any of us can compete with. What we can do, though, is figure out how to leverage competitive advantages that create opportunities on each campus and find ways to transform how the store operates and the services it provides. Each store will be different. The important thing is knowing, and making sure the administration understands, that staying competitive and running retail technology comes at a price. Store directors can sit down with MBS Systems Consultants to come up with a one, two or three-year road map for what is needed so that you can proactively budget and plan.