September 11, 2016

Commerce vs. Sports

Look at that image ... an image of the end zone at a Jacksonville Jaguars pre-season football game.

It's a swimming pool.

At an NFL stadium.

This should get us industry-folks thinking.

It got me thinking.

Retail is in a race to the bottom.

Sports is in a race to the top.

Are you going to find a swimming pool when you shop at your local Sears, or Macy's, or JCP, or Kohl's, or Shopko, or Wal-Mart, or any other classic retail brand?

I know, I know, you're going to say "should there be a swimming pool at your local Macy's?" And if you are going to ask that question, then I need to ask you a question.
  • "Why do you need to shop in a Macy's store in the first place, when merchandise via an #omnichannel strategy is readily available online?"
The upgrades to the stadium in Jacksonville include fancier club seats and amenities.

In sports, you have two tiers of fans.
  1. Those who watch on television.
  2. Those who attend in person.
So let's draw a parallel in our world. In our world, there are two tiers of customers.
  1. Those who shop online.
  2. Those who shop in stores.
Now, yes, the #omnichannel theory folks will tell you that customers do both (shop online and in stores), much in the same way that customers watch sports and then occasionally attend sporting events in person.

Here's what is interesting.
  1. In sports, you can watch the product for free, but fans continue to attend sporting events and continue to spend money at rates that outpace inflation.
  2. In commerce, you can browse the product for free, but customers increasingly purchase the products online at lower and lower prices (similar to watching sports for close-to-free via cable/satellite), but in commerce, the lower and lower online prices are driving down prices in retail stores or are stopping customers from ever entering stores.
So in sports, the introduction of essentially free access to sports caused fans to want to attend in person and spend more.

But in commerce, the introduction of cheap access to merchandise online caused "brands" to lower prices further in stores to encourage customers to buy more in stores, and customers revolted anyway by visiting stores less often, and industry experts loved this dynamic and called it #omnichannel.

What the heck are we doing?

Maybe we have commerce all wrong. Backwards. Maybe growth in e-commerce can only be paired with a fundamentally different retail experience that causes the customer to want to participate in retail? Instead of digital integration that ruins retail, maybe we need a fundamentally different retail experience?

I know, I know, you are going to tell me that there's not a darn thing you can do to make the Office Depot in-store experience so stunning that the customer has to visit an Office Depot ... you'll tell me that you can't shove a swimming pool in an Office Depot store and hope for the best.

Agreed.

Maybe commodity-based retail has to go away.

It's pretty obvious that commodity-based retail IS GOING AWAY!

Maybe the style of retail that survives aligns with the style of sports entertainment that survived free broadcasts of the sporting product?

I am asking you to THINK ... the opposite of reading a research report coupled with a tweet from a vendor and a podcast from folks who don't actually work in the industry that currently fill you head with what you should do.

Please THINK.

What do college / professional sports teams do to get you off your couch and into a stadium where $$$ is spent?

How does that relate to modern retail (or modern cataloging, for that matter)?