As Online and Offline Converge, Opportunity Arises

An innovative new pop-up shop by online retail giant Zappos blends the worlds of online and boutique brick-and-mortar, and may provide a window into the future of retail.

Partnering with retail logistics company OrderWithMe,  a startup that has raised a whopping 28 million in an unprecedented effort to change the face of mom-and-pop retail, this short-term concept allows for a synergetic partnership between online retail and small brick-and-mortars.

In the recent article, A Zappos pop-up shop becomes a test to change the nature of mom-and-pop retail, featured on VentureBeat, Gregory Ferenstein explores this new concept and what it means for modern retail,

“Online retailers will exploit physical retailers as shipping nodes, strategically placing product in their back rooms so that they can get product to consumers with same-day shipping. Mom-and-pop shops will exploit big online retailers’ vast storage capacity to help customers get the sizes and styles they want, without having to stock it all themselves.”

This merging of online and offline is at its genesis, and according to Zappos CEO Tony Hseih, far more than just a trend.

According to Hseih,“The convergence of online and offline seems to be an unstoppable force that I believe will ultimately change the face of retail. We are currently in a really interesting time for retail where on one hand many online stores are looking to have more of a brick-and-mortar presence for branding purposes (which is a big part of why we are launching a 20,000-square-foot Zappos pop-up shop in downtown Las Vegas for the holidays) and on the other hand many brick-and-mortar stores are looking to enhance their experience with more access to inventory in the cloud.”

This new retail experiment allows online and offline retailers to still play to their unique strengths,  mainly large inventory and customer interaction,  while simultaneously allowing these strengths to be co-opted for the benefit of the other.

Ferenstein goes on to explain, “OrderWithMe has physically placed the Internet experience inside of retail stores with a new touch-screen kiosk. If a style, color, or size isn’t in stock, customers can simply scan a barcode on the ShopWithMe kiosk and have the product shipped to them, ideally the same day.”

“Instead of hassling with with supply logistics, OrderWithMe CEO Jonathan Jenkins imagines that  physical retailers can put more energy into curating a better experience. Mom-and-pop shops know local tastes and can develop a personal relationship with their neighbors much better than can a digital giant like Amazon or Zappos.”
So what, might you ask, do big box retailers get out of this equation?
“Small retailers have something big box retailers and manufacturers need: reach.”, says Ferenstein. Same-day shipping presents a, ” logistical nightmare for Amazon, eBay, Google, and other big companies. They have to figure out how to predict sales and, in some cases, buy warehouses around the country.”

With a network of small retailers throughout the country, all located near consumers, these shops act as an ideal middle-man in the shipping fulfillment conundrum.

So, what are your thoughts on the merging of these once distinct worlds? Do you plan on incorporating any of these tactics into your business plan for 2015?

 

 

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