Saturday, February 11, 2012

Book review/summary: the end of traditional retail stores

Book review/summary:

The end of traditional retail stores : www.eindevandewinkel.nl by Cor Molenaar.


Book review: het einde van de winkel by Cor Molenaar



I found this book (although most is obvious for me) interesting and easy to read. Especially because many improvements that Mr Molenaar suggests, already are common in many other countries (e.g. Asia or the USA). I have seen a lot of examples Cor Molenaar describes in his book, during my recent travels.

It seems like we (in Holland) are running behind.

What are the dangers for traditional retailing?

Internet: is a threat to traditional retail because, traditional retail has to compete against unknown competitors and competitors who have less limitations like shop opening hours and location.

Wholesalers/suppliers who are going to sell at the web: for example big brands are starting their own webshops to get into contact with customers.

Customers: have a new way of buying and internet is integrated in this shopping process.
Grocery's are still bought locally and often in traditional shops, emotional shopping also still takes place in traditional retail, but more and more people buy specific products via internet. Think about books, music, clothing etc. Also a trend is that big web shops are more and more opening physical stores.

New buying behavior: "information" is being de-attached from buying. A good example is the travel business.


What kind of shopping can we define :

  • Shopping 1.0 - traditional retailing, personal contact with customers.
  • Shopping 2.0 - (mail order for example) there is no personal contact with customers.
  • Shopping 3.0 - the new shopping is centralized around the customer.
The book starts with summarizing a few (Dutch) problems in retailing.
  • The limited shopping hours (most shops are open only 54 hours a week
  • The absence of big shopping malls with plenty of parking space
  • The extreme costs of parking 
  • The unfriendliness of shop staff
  • The lack of making shopping "fun"
  • The high costs of shop rental (is getting more difficult since there will be less people visiting the shops in the traditional city centre's) 
Customers have a choice nowadays where they buy the products. They might even buy it abroad. And I think this will (with the EC plans to build more trust in e-commerce) only increase. The shop or company who gives the most information and who who sets the customer at the first place, will benefit the most, worldwide. The next competitor can be in France!

The future of shopping is based on social shopping and social buying.

There is a difference between traditional retail, where location and assortment was important and with a strong focus at transactions. And the new way of retailing where the customer is in control. The demands and wishes from the customer should be the new focus.

Yes mr Molenaar, Internet can really help traditional retailers with listening, and engaging with customers. Many chances here, for both big and small companies. They should start with a communication and engagement strategy. Use social media tools, use email, use special internet events, use a combination between online and offline (reviews printed on goods sold in the store for example) etc.

Use internet in the communication strategy of traditional retailers and learn and listen to your customer or prospects.

New chances and trendds for traditional retail:
  • Shopping in "out of town" shopping malls
  • Traditional shops in city center
  • Orientation and information at the internet and then buying via internet or at the physical shop
  • Service, advice, touching articles, take away immediately etc.
  • Build relationships with customers and prospects.

Just like in the internet marketing, the important words for traditional retail are also: build a relationship/engagement.

The book is about understanding the principles of internet and the change of buying behavior. A lot of interesting case study's and examples are described.

In the book often the example of "Trafford Centre" in Manchester is described. A big shopping mall that makes shopping fun. It is not only shopping at Trafford Centre, there are pubs, a movie theater, easy to reach by both car and public transport, nice decoration, always open, free WiFi etc. I have seen similar malls in for example Bangkok and Tokyo, and indeed it makes shopping fun.

Let's face it: the current customer knows more then the salesmen in the shop. Find a way to work with this, it will not change. 
Find a way to work with customers that know more then the salesmen in the shop. Don't just say  (what still often happens) : "I cannot compete with the webshops" or, what also often happens, tell people that they are wrong with the information they found at the internet. 
A salesmen should make a change to listening and motivation of visitors of their shop.

One of the companies that is really doing a good job at social media and in their stores is Best Buy. Of course this book also has some examples from Best Buy. According to an article in the book, Best Buy has in their stores "ambassador's" that talk to visitors and show them new gadgets. Best Buy has a pricing system that can vary each day and they really focus at service. 
In the shops they have touchscreen kiosks to order products online (and pick it up at their checkout or to check reviews, or just to compare prices). Now that's transparency. I haven't visited such a shop in Holland /Europe yet.

The book has advice for retailers: it is very important to give more service: e.g. free WiFi, special apps for mobile phones, free transport to their shop etc. These are things I already saw in Hong Kong and Japan during a recent holiday.

The book describes about cannibalization, so who is the strongest, the local retailer or the big brand that both are active at the internet (and sometimes in stores as well)

The question is who has the best contact strategy with the customer. 

I think many chances are here for the local retailer. Big brands are far from ready for the personal touch local retailers can give at this moment. When local retailers discover the possibilities of online communication there are a lot of opportunities for them.

Retailers big or small, need to actively keep a (communication) relation with the customer or prospect.

A good example is Kruidvat with their "extravoordeelkaart"

The book is filled with a lot of retail news..many examples of shopping malls that are re-inventing themselves.

What are the limitations for physical stores?
  • Limited radius 
  • Limited assortment
  • Limited shopping hours
  • Often no knowledge of individual customers
  • No direct communication
  • It takes time for customers
What are the advantages for web shops compared to physical stores.
  • Worldwide
  • Unlimited assortment
  • Always open
  • A lot of knowledge about customers
  • Only direct communication
  • People can shop when they want

A big part of the book describes the possibilities of internet marketing but all known to me.

Retail and technology

Technology is coming into physical stores. This is a real nice trend. In Japan I already saw a lot of nice examples, but the book also describes some idea's..

Tweet mirrors (already exist) and I used one recently is a great tool. Simply wear some clothes, go to the mirror, make a picture and share it with your friends and ask them what they think. In my opinion (not described in the book) this is not only a way to sell directly to the customer that uses the tweet mirror but an excellent opportunity to make your physical store known to all of the friends of the person that uses the tweet mirror.

Real life images are coming up as well. You can see yourself in new clothing in a shopping window. You won't have to enter the shop!

Electronic customer recognition in stores and to give personal advice using video is coming up as well. Narrow casting will be personalised, recognition in shopping windows when you pass by etc.

What is not really mentioned in the book is the future of location based marketing. Signals or marketing messages people get, when they are near your store, or even more targeted, when they are near your store and most likely want to buy something you sell. This all based on information from social networks.

Important throughout the book: increase your margin by service/advice.

The consumers role is changing. From push to pull. From the last part in the chain to the first part in the chain.


The book has much more chapters, especially about internet marketing, new business model's and case study's.Interesting for everybody to get some insight in the new way of retailing.

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