Will you be swallowed up by retail’s ‘great divide’?

For me, Batman is the one that can most clearly be taken seriously. He’s not from another planet, or filled with radioactive gunk. I mean, Superman is essentially a god, but Batman is more like Hercules: he’s a human being, very flawed, and bridges the divide.

– Christopher Nolan

It won’t escape many of our readers that there is indeed a new order in the consumption of products and services that is rapidly exploding before our eyes.

My washing machine can order spare parts from its supplier, while the AI-driven “we-plenish” device in my grocery containers takes care of that menial task of visiting the local grocery shop, giving me time to try on the new Clooney jacket that arrived this afternoon, courtesy of that midday movie I was streaming. A local drone has just delivered my latest delivery, and my latest Amazon Prime offering has to be seen to be believed.

Orwellian, a scene from Woody Allen, or coming downstream faster than we actually realise?

One aspect is for certain: we have entered the great divide, or more specifically, there is world of difference developing between shopping and buying.

The growth of online is in the “buying space”. More activity than aspiration, the activity of buying is typically about best price, range, assortment and maximum convenience. This is fertile ground for e-commerce and marketplaces such as Amazon and Alibaba, and it’s where online growth is coming from.

As our friend Steve Dennis says, “Buying is mostly transactional. More mission, than journey. More search, than discovery.”

Most times buying tilts towards being need-driven rather than motivated by want. At the heart of buying is efficiency. When we are in buying mode we care primarily about speed, convenience and a broad, yet easy to navigate, assortment. Buying tends to be highly-value driven. When transacting digitally it must be easy to compare prices.

With this lens, it should be easy to see that e-commerce is optimised for buying. The categories that do the best online are those where there is a strong, though not necessarily exclusive, buying dynamic.

Unsurprisingly, this is where Amazon has the greatest market share and growth. When it comes to being remarkable in the realm of buying, much of it is about eliminating friction in the path to efficiency, be that on price, assortment and/or convenience.

More recently, platform businesses like Alibaba and Amazon have made the buying process far more efficient in many categories, leading to major market share gains and the demise (or teetering on the brink) of many brands that could not keep pace. But let’s be clear: Amazon is not “the everything store”. It is, however, quickly becoming the anything-you-want-to-“buy” store. Absent a far greater bricks-and-mortar presence, Amazon will continue to struggle in its quest to dominate the “shopping space”.

Buying becomes an ambient activity that is executed everywhere (at home, on the go, at work, in leisure) and anytime. In addition, all steps in the cycle of “need occurrence”, “buying and  consumption” become more and more naturally integrated into the daily mental and physical routine of consumers.

An uninspiring  physical store is largely superfluous in this emerging purchase process. The traditional value-adding functions of the store-based retailer (creating an assortment of products, providing product information, enabling the transaction, providing physical distribution services) are also called into question unless the sensory experience is dialed up exponentially. This is the great opportunity and challenge confronting physical shop retailers.

The “discrete” activity of shopping at a given place and time  needs to be  experiential, human, tactile, interesting, exciting, fun, social, interactive, rewarding and therefore shops are pivotal. It will be less and less the domain of mid-market retailers that can’t see the divide and plod along with shopping as it used to be. Retailers that can’t see the difference and try to out-muscle in the “buying space” simply are racing to the bottom. Confuse the two and your customer is confused.

Business strategy is becoming predicated more closely upon what our clients can customise (shopping ) and what they can commoditise (buying).

We might “buy” that replacement washing machine powder, however, we shop for something special. Different experiences, different behaviours, different mindsets. Best fit retail.

Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected member of the global retail expert’s alliance Ebeltoft Group

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