retail news in context, analysis with attitude

by Kevin Coupe

SAN MATEO, Ca. -- After writing about retailing and business for more than 30 years, there aren't many days that I can honestly say are completely different.

Wednesday was one.

GMDC's initiated its Retail Tomorrow conference with a two-day Northern California "immersion" event designed to force retailer and supplier attendees to not just accept the notion that the competitive landscape is changing, but to embrace and enable that change within their organizations. That is easier said than done, and there clearly is the aroma of aspiration in the air .... along with the perspiration that comes from all the smart people in Silicon Valley trying to change the world, or at least little pieces of it a little bit at a time.

The challenge was framed by Nielsen's Scott McKinley, who noted that the Uber driver who brought him to the conference had identified himself as a former equities trader at Webvan, the long defunct e-grocery business that collapsed under the weight of its own unmet promises and enormous debt. The irony was not lost on the group.

McKinley made the point that retailers and suppliers are in a position where they can not just identify the drivers of shopping behavior, but also track how that converts to purchase behavior. This isn't a choice, he suggested, but a mandate to create a more personalized shopping experience that will resonant with consumers and permit them to compete with larger entities. (Think Amazon.)

At one point, McKinley put up a chart on the screen which he said essentially listed every possible data point that now is possible to know about customer behavior; it was one of those cases where the difficulty in reading the chart actually made the point about the extent of what is knowable and actionable.

Which got me thinking about the retailers that may not have the resources to access that level of data, and the significant disadvantages they may be facing. In so many ways, this underlines the degree to which retailers unable to access such data need to be extraordinarily sharp in terms of how they identify their own differential advantages and communicate them to customers. The room for error is narrow, if it exists at all.

The group then spent several hours visiting some fascinating retail experiences in nearby Palo Alto, where the sense of retail history becomes palpable when you drive past the original Apple Store.

The first stop was B8ta (pronounced "Beta"), a fascinating retail store that caters to both consumers and business customers. Essentially, the store leases out small spaces on Apple Store-like tables to technology businesses that want to test out their products' viability. The products range from electric-powered skateboards to juicers, virtual reality viewers to high-tech security systems. B8ta has a highly trained staff that helps guide customers through the store, and rotates products regularly to make sure there is variety; it also has technology that is able to track how customers interact with products, so that suppliers have the maximum amount of actionable data. B8ta has a full supply of products for customers in the backroom, and it only profits from the table lease payments; it takes no cut of the sales.

FYI ... there are three B8ta stores at this point, in Seattle, Santa Monica, and Palo Alto. And, it also is testing the concept inside Lowe's stores, which is handing over the space as a way of creating a little in-store excitement and extend its ability to appeal to shoppers in new but relevant categories. You can see pictures of the B8ta store at right, and see its website here.

From there we went to Beam store, which features mobile robotics including "emote telepresence" that would seem to have an enormous number of applications, from providing customer service in a retail store to a multitude of purposes in a warehouse. Fascinating stuff, though one attendee pointed out that rather than serving as a way to eliminate labor, it also could help retailers to provide customer service in new places, but from remote locations (in much the same way as JetBlue's reservations staff can be in remote locations when taking calls).

The company that makes Beam is Suitable Technologies, and you can access their website here. Pictures are available at right.

Finally, it was on to one of the more unusual stores I've been to, called Relonch.

Relonch addresses the precipitous decline of the traditional camera business - 10 years ago, 127 million cameras were sold, a number that was down to 20 million last year. Relonch takes the position that it is in the photograph business, not the camera business - so it essentially gives its customers a high quality camera which automatically sends photos taken back to the company, which then sends the customer "a selection of pictured photos in preview resolution that you shot the day before. Then you decide which ones are truly remarkable and pay only $1 per full-resolution photo. " They only charge you for the photos you hand pick as the best of the best.

Customers do have to make a $500 commitment - but that only means that they have to buy 500 photos, with no time limit. You can check out Relonch here.

While I must admit that I cannot imagine making this deal with Relonch, it did get me thinking about how such a business model would work in the food business. What would happen if a food retailer went to a customer and said, "We want to give you a new refrigerator/freezer, and all you have to do is commit to buying $200 worth of refrigerated or frozen foods a month from us for X number of months." They'd be creating their own ecosystem, of a sort, though I have no idea how the economics of this would work out ... but that essentially is what Relonch is doing.

(One of the conference attendees said not only was it not the dumbest idea he'd ever heard, but nobody would be surprised if Amazon announced such a program next week.)

The day was not over. The next stop was Plug And Play, a Sunnyvale, California, accelerator that provides infrastructure for startup companies and plays matchmaker between them and major companies that serve as their partners. We got a tour of the place, which fairly hummed with youth and enthusiasm, and then had the opportunity to sit through a half-dozen pitches by startup companies looking to get their sea legs in the supermarket business. And we followed that with a panel discussion, which I had the privilege of moderating.

If I could sum up the panel in just a few words, it would be to point out that pretty much everyone agreed that there is a gap - perhaps a chasm - between the traditional retail world and the forward-thinking, innovation-oriented people we'd met at Plug and Play. Some of it was demographic, some of it was attitudinal ... but there was a sense that the two sides have to engage with each other, invest and ideate speedily, and find a way to amplify the advantages of legacy business models with the opportunities provided not just by new technologies, but new thinking as well.

My sense is that GMDC would be happy that its new Retail Tomorrow conference is getting people to think this way ... which is to say, not the way we necessarily would've been thinking yesterday.

I'll have more tomorrow from GMDC's Retail Tomorrow ...

KC's View: