Published on: June 26, 2008Now available on iTunes…
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Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the craft of retail website design.
There are days, I must admit, that I am fascinated by the extent to which people will defend the old way of doing things, seemingly unwilling to accept or believe that change is inevitable, immutable, unstoppable. They call it “progress” for a reason – it is about moving forward, not looking backward.
I think this happened this week with all the emails about the Ikan system, which allows people to scan their used-up CPG products at home, creating an online shopping list that they can use to replenish their larders at will by using an Internet connection to their local retailer.
Some people said that they simply didn’t see the need for such technology, that it was easier to keep a note pad next to the phone or posted on the refrigerator door. “What’s the point?” seemed to be the reaction from some folks.
Now, you are entitled to your opinion. But I think you are wrong.
This has nothing to do with the Ikan system itself. This particular iteration of replenishment technology could crash and burn next week, for all I know. But the concept, it seems to me, is sound. It is a logical next step for the food business – there is scanning, there is e-commerce, and there is home-delivery. In-home scanning and replenishment simply combines these facets of the business…and the next generation of shoppers not only will be willing to use it, will want to use it, but actually may spurn retailers that don't offer some version of it.
(By the way, I was thinking about this the other night, and I’m petty sure that the old Smart Store exhibit in Chicago back in the nineties predicted this technology.)
It’s possible. It may even be probable. And I wouldn’t bet against it. In fact, when I think about it, maybe the more amazing thing is that we’ve taken so long to get to this point.
But here’s the thing. This may not even be the most amazing and revolutionary thing that could happen to food shopping in coming years.
I’m a huge fan of the concept of automatic replenishment. I use Amazon’s “Subscribe and Save” service for a variety of product categories, and it works extremely well.
To the best of my knowledge, though, there are almost no traditional retailers working the automatic replenishment business. They all depend on the old model – people make a list or don't, drive to the store, fill their carts, go through the check outs, use coupons or not, often forget a couple of items that they meant to buy, transport their purchases home, put them away, and then repeat the process as needed.
Sort of sounds like the same way people did it in the fifties.
I have to wonder if an enormous business opportunity is being missed here, and if someone is going to step into the breach and make a killing.
Imagine if a bunch of CPG companies – such as Procter & Gamble, Kraft, General Mills, Coca-Cola, and maybe some others – decided to get into the automatic replenishment business. They could create a nationwide business that would disintermediate traditional retailers and by its very nature would create de facto loyalty to their products, reducing the likelihood that customers would choose a competitor’s items. It might be expensive, but on the other hand, these manufacturers could actually take some of their promotional moneys away from traditional retailers and apply it to this model. And probably at least break even.
If the CPG companies didn’t want to create a new and separate business, they could create an alliance with an existing entity – Amazon.com, for example – that would serve as the distribution system. If the CPG companies put their muscle behind such an effort, it could have enormous horsepower.
Now, I’m not predicting that this is going to happen. But I wouldn’t bet against it.
It is hard for me to believe that there aren’t going to be paradigm-breaking, revolutionary business models that will change the face of the business. There have to be, if only because the human capacity for innovation dictates that such models emerge. We can't stay stuck in the nineteen-fifties forever.
In-home scanning and automatic replenishment are actually modest advances compared to what is possible.
It is all about inevitable, immutable, unstoppable progress. All it requires is a willingness to innovate, challenge convention, and demonstrate real leadership.
Who will step forward? And what will the next great revolutionary advance be?
For MorningNewsBeat Radio, I’m Kevin Coupe.
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