When I was a kid, assembling my Christmas list meant snipping photos from the back of the Service Merchandise catalog. I relished the arrival of that thick, glossy tome each fall, not least because its pages meant my first look at that season’s new line of Star Wars toys. These were always near the back, after the jewelry and the kitchenware and all the other boring grown-up stuff. This was the early ’80s, so there was no web, and I was too young to take myself to the store. But occasionally my mom would relent and drive me over to the strip mall, and I’d get to hold in my hands the action-figure blister packs and Jabba the Hutt Action Playset I’d coveted while thumbing through the pages back home.
Little did I know at the time I was having a multichannel retail experience.
“Multichannel” is retail industry jargon for having multiple ways to market and sell to customers: a store, a catalog, a website, a Twitter feed. Today, retailers aspire to an even more important-sounding goal: “omnichannel,” which means creating processes that let customers interact with a business across multiple channels at once, such as using an app while in the store or going to the store to pay with cash for something you bought on the website.
But omnichannel has taken a curious turn lately. For decade-and-a-half or so that e-commerce has existed, moving to multiple channels has almost exclusively meant old-school retailers such as Macy’s and Walmart figuring out how to market and sell online. Recently, however, some of the online-only retail startups that get the tech cognoscenti the frothiest are going “omni” in the opposite direction: They’re opening up stores.
The latest is Warby Parker, the maker of vintage-inspired spectacles that recently raised more than $41 million in funding and has now opened its flagship retail store in New York’s Soho neighborhood.
“We think it will add additional gravitas to the Warby Parker brand,” co-founder Neil Blumenthal told GigaOm. “Because as great being online is, we haven’t seen many lifestyle brands emerge online. So we think that having this physical space that people can come and live the brand will be helpful.”
To translate, people still like going to the store—a lot. I just wrote about a Forrester report that found physical stores still held more influence over people’s purchasing decisions in every category of retail except travel.
For a niche company like Warby Parker, embracing the physical showroom makes sense, in part because it’s easy to imagine how its bespoke aesthetic and inventory migrate from online to offline.
More difficult to picture, however, is how the world’s biggest monochannel retailer might follow the online to offline trend. Amazon’s success as a company so far, and its evisceration of traditionally offline competitors, has depended largely on not having stores. Without the overhead, Amazon has put relentless downward pressure on price; without physical walls to limit selection, Amazon has made the miracle of a million-item inventory feel mundane. (Also, not having physical stores has allowed Amazon to avoid collecting sales tax in many states, though the company seems to have factored that long-held advantage out of its business model.)
Yet it’s hard to imagine Amazon isn’t thinking hard about its place in the physical world. Yes, its price-scanning app has turned every competitor’s store into an Amazon showroom. But after a point, the returns generated by hanging a percentage of your business on someone else’s physical space might start to diminish. The pleasures of going to a physical place to shop don’t seem likely to disappear so long as people still have five senses. As much as Amazon has depended on keeping its physical distance from customers to succeed, Jeff Bezos may some day want to engage the entire human animal.
If that happens, I think an Amazon store might not look so different from the Service Merchandise of my youth. As a kid, the place felt like a wonderland, putting plastic flesh on catalog-fueled dreams of Lucasfilm merch. And because I wasn’t spoiled rotten as a kid, I never left the store with anywhere close to everything I wanted, which sent me back to the catalog again.
A physical showroom would allow Amazon to re-create much the same experience, but without carrying any inventory at all. Amazon could instead focus strictly on the sensory pleasures of shopping while allowing its finely tuned delivery infrastructure to take care of actually getting people their stuff. In its heyday in the
70s and80s, Service Merchandise was a hugely successful retailer that was eventually crushed by big-box retail on one side and the web on the other. Amazon is already the online equivalent of the biggest big box chain in the world. By fusing the best parts of big-box and online into a catalog showroom for the 21st century, Amazon’s business model could end up looking to the future by looking a little bit more `80s.