The return of local retail?

Local retail revival won't hinge on online-style consumer data intrusion; it will require getting back to basics.

About a month ago, IBM published its five tech predictions for the next few years. They’re mostly the sort of unexceptional things one predicts in this sort of article — except for one: the return of local retail.

This is a fascinating idea, both in the ways I agree and the ways I disagree. First, I don’t think local retail is quite as dead as many people thought. Now that Borders is no longer with us and Barnes and Noble is on the ropes, I see more activity in local bookstores. And the shopping district in the center of my town is full; granted, we’re talking reasonably prosperous suburbia, not Detroit, but not too many years ago there was no shortage of empty storefronts.

What surprised me was the reason IBM thought local retail would return. They observed that many of the same techniques that Amazon and other online retailers use can be applied locally. You walk into a store; you’re identified by your cell phone (or some other device); the store can look up your purchase history, online history, etc.; it can then generate purchase recommendations based on inventory; and send over a salesperson — with an informed view of who you are, what you’re likely to buy, and so on — to “help” you.

Well.

I like walking through local stores to see what’s there, and I even buy stuff in local stores (though, no doubt, not as frequently as they’d like). And I almost never want sales staff coming over to “help” me. I’ll ask if I need help. And I’d certainly find it more than creepy if salespeople came over and already knew what I was looking for, and made helpful suggestions about what I’d like to buy. I’d be more likely to leave than to give in to the upsell.

Some years ago (when Amazon was only a gleam in Jeff Bezos’ eye), I observed that local retail was dying in part because local retailers had given up. Stores didn’t sell what you needed, and customer service was awful. I remember setting up my home office and having trouble finding a business supply store that would sell me a desk or a chair — or, for that matter, a 3-hole punch or a case of copy paper. They had plenty of stuff on the shelves, but it was mostly greeting cards. (Why greeting cards in office supply stores? Don’t ask me…) And yes, “awful customer service” includes the obnoxious salesperson who won’t leave, even when it’s clear the store doesn’t have what you want. No wonder Staples ate their lunch. Staples will even carry the case of copy paper out to the car for you.

If there’s going to be a revival in local retail (and I believe there is), it won’t be by becoming more intrusive and obnoxious. It will be by getting back to basics: well-stocked stores that have merchandise that meets customers’ needs, and good service to help customers find what they want without being intrusive, to handle issues like returns efficiently and politely, and even to haul your stuff out to the car.

Unfortunately for IBM, the retailers won’t need Watson to do that.

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  • http://broadcast.oreilly.com/david-collier-brown/ davecb

    IBM may have a solution looking for a problem. My favourite local bookstore actually had a knowlegable person who remembered what you’d bought lately, and could make suggestions based on whether you liked his previous suggestions or not.

    If I wanted to use computers in this, I’d make sure the cash wasn’t a crowded, rushed queue, and display my recent purchases to the clerk. He or she could then have that same kind of non-creepy discussion without requiring them to have such a good memory.

    Mind you, that’s exactly the *opposite* of what business consultants tell businesses, specifically including bookstores like Borders or Chapters/Indigo.

    Those “consultants” were selling snake-oil. In this case, it was from a poisonous snake.

    –dave

  • http://maneydigital.com Mike Maney

    I, too, think we’ll see a return to local retail…though for different reasons than you point out.

    Amazon (especially Prime) has changed the game for commodity products, with commodity taking on a much wider definition than traditional staple goods. Think electronics and things you’d find in a mall. If anything, Amazon may have a larger negative impact on real estate than retail.

    Where local wins is the experience and craft. Things consumers don’t necessarily find or look for online. Additionally, and this is pure personal observation, there seems to be a growing movement toward more socially responsible economics — something that goes beyond buying green and into supporting their local economies.

    My prediction is we’re entering a world where Amazon and local coexist.

  • jjolla

    “well-stocked” is the magic word … that’s where the local store will always struggle … and increasingly so