Q&A With Neil Stern
Ever wish you had a crystal ball to see into the future? In The Gist’s latest Q&A with industry influencer and futurist Neil Stern, we explore his retail predictions for some of the industry’s most powerful players and assess the current environment of retail innovations.
We couldn’t do a Q&A without talking about the 300lb gorilla Amazon. What are your thoughts on the recent expansion into brick-and-mortar?
I believe Amazon is the equivalency of a master magician. The early moves they are making into retail are clever sleight of hands maneuvers. The Amazon Book Stores are wonderful examples of retail but I don’t believe their real intention is to open a chain. Think of these as Data Analytics stores and opportunities to test dynamic pricing, hyper localization, seamless technology, etc. While they may one day get serious about retail, these tests are just that, tests. The scary thing is that they are just getting started-they could get serious about retailing fast with an acquisition.
Media hype continues to tout the death of physical retail, would you argue a counterpoint to all the news coverage?
Retail is undergoing a metamorphosis. The old traditional models are dying to be replaced by something else that is new and exciting and better purposed to serve customers’ needs. While this is a painful process, there will still be a sizable and important brick and mortar business on the other side.
Who are some of the brands that you believe are creating innovative concepts and solving real consumer problems today?
Newer models are going to be focused on the unique benefits of physical retail: I can interact directly with the product. I can have personal interactions with a knowledgeable employee. I can socialize with my friends and the public. I can (in the traditional sense) gain immediate access to the product. Etc. Newer models like Warby Parker are able to focus on most of the above (save immediacy) and can focus on amplifying these other elements. I love Amazon Books for merging the strengths of on-line and off-line together in one model. And, there are great experiential stores being built which immerse the customer together with the product. Concepts like Whole Foods, Dylan’s Candy Bar, Restoration Hardware and some of the formats we have worked on in Korea like EletcroMart and Toy Kingdom don’t forget that there is still joy in great product married with a great experience.
You’ve spoken before that the future of brick-and-mortar will include more “experiential” stores like the 5-story Nike Soho location. What purpose do you think these concepts serve, and where’s the balance in a retailer’s portfolio?
Experiential stores (or Flagships) serve as the ultimate expression of a brand, fully immersing a consumer into the essence of a Brand’s or Retailer’s DNA. These stores have a halo effect that lifts the brands’ perception across the entire market and need to be viewed not just as individual P&L’s but what they do for the entire market. Clearly, brands like Apple and Nike have recognized this but even legacy retail brands like Sak’s or Bloomingdale’s are still defined by landmark Flagship stores. A focus on creating great experiences in the key global cities around the world can help build and sustain brands and retailers.
From high-tech digital integrations to automated formats, who’s getting it right? (And who’s missed the mark?)
The key is that technology in and of itself is never the solution. It needs to be linked to a tangible benefit for the consumer. Does it make the shopping experience better, more seamless, more exciting, etc.? Eatsa, the automated fast food concept in San Francisco is wonderful because the technology makes ordering easy and seamless as well as providing real time feedback. It’s not for everyone, though, given the people-minimal environment. But, the same customer might enjoy the convenience of Eatsa on one occasion and the immersion of an Eataly on the next. You can look at a technology laden store like Rebecca Minkoff to see the do’s and don’ts of technology. Being able to adjust lighting in the fitting room or request a new size…brilliant. Ordering a cappuccino on the digital screen…really? Interestingly, the sellers of technology (like Apple) feature relatively little in their stores. But, Apple’s ability to quickly check people out through mobile POS or schedule service on-line shows a focus on what the customer really cares about.
Any trends you’ve identified at the intersection of both grocery and retail? What do you think the two categories can learn from each other?
Grocery is a fascinating category because razor thin margins necessitate efficiency and innovation. The great grocery stores like Wegmans and Whole Foods marry product and theater together to immerse customers in the products. They have also added eating in the store to develop a grocerant concept. Retail needs to get more exciting and interactive—I can buy products on-line but I can buy the experience!
As an author of two books, Winning at Retail and Greentailing and Other Revolutions in Retail, if you were to write a book today, what be the subject and the basis of your inspiration?
I already have the title—I just need the answer! Winning at Retail in the Age of Amazon—How to Survive, Thrive and Reinvent Your Business. I think we are all looking for the light at the end of the tunnel.
As an individual highly respected for your influence and insight into the industry, whom do YOU follow for insight?
There are so many great thinkers in the retail space today. Doug Stephens (The Retail Prophet) has a great view of the future. Deborah Weinswig at Fung is awesome on technology trends. Brian Gildenberg from Kantar Retail is brilliant and I’m always stealing his stuff.
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