Monthly Archives: December 2013

Drones to your Doorstep: The Future of Retail

I’m sure you saw Amazon Prime Air in the news this past week. A long term project Amazon is developing that will deliver 5 pound packages via small autonomous drones. The applications for this will be unbelievable, taking the distant idea same day delivery and making it same hour delivery. I will be shocked if we will go to stores for any kind of regular purchases in the future. RFID chips, smart storage products, and brands monitoring all of our wants, In the near future, we will be bombarded with products. We will be given so much, we will be sick of getting free stuff.

My idea for smart storage includes sensors to monitor cabinets and refrigerators. Up to date inventory is always known, and regularly used items are constantly kept in stock. When you think of eating cooking grass fed sirloin after your weightlifting session, the items are automatically delivered and stocked into the storage. Imagine if you have a personal drone that you would send a message to and it would go to the distribution center and pick up your steak, and have it in the refrigerator when you get back from the gym. Since you tweeted about hitting a new squat max at the gym, while the drone is at the distribution center, a pair of Nike weightlifting shoes are added to your order. Free of cost. Nike would hope for a tweet from you or telling your other weightlifting friends about the act of kindness. Building context in your personal relationship with Nike.

With commitments to razor thin margins, it will be tough for stores selling commodity products (anything with a barcode) besides Wal-Mart and Amazon to survive.

Why the future retail will be awesome: Experiential Retail

Less than 50% of people go to Apple stores to buy products. Why do they go? Not for to compare products with other companies, but for the curated experience. The only brick and mortar retail stores that will succeed will provide something unique and enjoyable that can’t be replicated by a delivery service. Look at what Barnes and Noble has done over the past two decades. Feeling the heat from Amazon, they have switched their model to include in store cafes, drawing in a much more regular crowd. This diversifies their revenue model and also increases foot traffic into stores, which has potential for more sales.

Farmer’s Markets in vibrant, diverse communities are fantastic examples of experiential retail. Consumers can interact with the people who produced the products they are buying an hear first hand why they should buy them. Artisans like small farmers are something I believe will always exist, because it is a form of art that cannot be scaled up. Eastern Market in Detroit is the best market I’ve ever been to. There is a huge variety of farmers, specialty food producers, a wide variety of musical performers, but what separates Eastern Market from Whole Foods, is an energy in the air that is something not found in grocery stores.

Another personal change I hope for: coffee shops that don’t have high speed wi-fi and lack of power will be out of business.& Power, a coworking space in SF is looking for different ways to extract value from patrons in a cafe setting. Hopefully a model that encourages productive, helpful, social community members to stay in cafes will be discovered. Example: right now I’m having a hard time merger two websites with DNS codes. Something I don’t understand at all, but tons of people could easily fix it. When they help me at the cafe, I will give $5-$10 to the cafe to help cover that person’s costs for the day.

What do you think? How will retail stores adapt to the changing landscape?

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