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CARBON MEETS SILICON
27 July 2018

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CARBON MEETS SILICON

That slightly scary future is thankfully some way off but there are early signs in retail of a more fluid dialogue between carbon and silicon- the physical and the digital worlds.

We are living in the retail age of the three A’s- Apple, Amazon and Alibaba. All of them blur the lines between physical and digital worlds.

None of them started out as retailers- but they are now calling the shots as to how retail is carried out.

Customers don’t think about what channel they engage with. Thanks to digital enablement, what was once a linear path to purchase- looking at marketing messages, visiting a store, researching the product, purchase and use- is now fragmented and any part of it can take place anywhere.

We talk about the digitally enabled shop but what does that actually look like? 

Well, it can look surprisingly like a pre-digital shop.

Amazon’s physical bookshop looks at first glance like the sort of conventional American bookshop that started to disappear in the 21st century, ironically rendered obsolete by the likes of Amazon themselves. But you shop it just like the Amazon web site. For a start- and this is devastatingly simple- all of the titles are displayed face out. Bookshops evolved from libraries where books were catalogued and stored space-efficiently for the convenience of scholars, not browsing customers. But this is how books are stored, not sold. Books are judged by their covers on a web site- and in Amazon’s world, in shops too. This is only the start though. By analysis of data gathered online, Amazon knows exactly what titles to display in what market. So a customer browsing the shop is likely to find a selection of books that’s relevant to them, each one displaying its cover and accompanied by a review to aid choice. As an Amazon Prime customer you get the online price, not the list price. So you could say that the purpose of the shop is partly to benefit valuable Amazon Prime customers and recruit more of them. So, digital feeds physical feeds digital.

Hema Supermarkets, Alibaba’s foray into “New Retail,” blends the physical with the digital. For fresh-obsessed Chinese customers, Hema provides a channel agnostic fresh food experience like no other, incorporating everything from live seafood to a mobile app that provides information on sourcing and nutritional values. In-store restaurants provide theatre and a sense of community, while a pay as you go system encourages in-store trails of products rather than having to wait for the checkouts. Online shoppers can enjoy half hour free delivery within the catchment area. Online blends with offline in the provision of provenance information and recipes. You can pay with your Alipay account or using WeChat, China’s ubiquitous and versatile social media network. You can also use WeChat to share your photographs of fresh food, restaurant dishes and the meals you create with your Hema purchases.

Alibaba has done a similar exercise with the furniture and homewares category at Home Times. Like Amazon they are able to curate products from local customers’ preferred categories to display in store. Each product has an electronic price tag that synchronizes prices with online prices and customers can order goods using their own mobile devices via QR codes. Large screen displays on the wall allow customers to see their desired purchases in a virtual home setting. A mix of physical and virtual displays means that the shop becomes very space-efficient.

Social media has provided the means for a certain genre of shops not to rely on mass visitation. It’s enough that they simply exist in some obscure location where a select few customers, bloggers and retail tourists can visit and (importantly) share the experience. Online does most of the heavy lifting in selling the product. They are often pop ups – highly creative but short-lived.  One example is Off White’s Tokyo store in Aoyama. It’s a surreal re creation of a twentieth century white-collar working environment. It’s bright, stark and vaguely disturbing- but it’s visually striking and photographs extremely well. And that’s the whole point of it. It’s instagrammed voluntarily by every visitor. User generated content is the new gold- and it’s free. Each and every shop design we now complete needs to be not just functional but highly photogenic. No one instagrams boring shops.

The implications for conventional shopping centres are obvious. Fewer, more engaging outlets for each brand. Shorter lease terms. Multiple uses to absorb the excess space.

Digital enablement doesn’t necessarily mean Endless Aisle technology and iPads everywhere. Clever design of the physical environment can now feed the digital. Digital data in turn informs the design of physical environments. The cycle continues.

Carbon meets silicon meets carbon. It’s the new retail.

Gary McCartney 

27 July 2018
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