Five years ago, on December 20th, I was sitting on a white leather couch at my home feeing like a queen. My Blue Heeler was at my feet and Seattle rain was softly trickling down wet windows. Through software and algorithms, my team controlled every associate, every move and every item of the worlds biggest selection, orderly tucked into Amazon’s warehouses worldwide. Santa Clause had to be smiling broadly as millions of customers were getting their gifts in smiley boxes in time for Christmas. Life couldn’t have been better.
“The next retail revolution is going to happen in bricks and mortar stores”
As usual, January brought customer returns, including a lot of shoes and apparel. It all seemed so inefficient and unpleasant for those customers. I could picture customers busy re-wrapping their brown boxes, attaching shipping labels, and placing them on the porch, hoping a postal carrier would come before thieves decided to interrupt the already cumbersome returns process. All this made me crave for the simplicity of physical stores, where my customers could try on things and, for the most part, never have to deal with returning a product. Adventure was calling, so I left Amazon to explore a new way that would take advantage of everything I had learned about Online applied to physical stores. Realizing I had no idea of what life was like in the physical retail world, I decided to experiment and opened my own bricks and mortar apparel store a few blocks away from the freshly-minted Amazon campus in South Lake Union, Seattle.
Setting up my very first bricks and mortar store was a lot of fun and I couldn’t wait to meet my new customers face to face and advise them on fashion trends. We created name badges for sales associates, proudly calling us “stylists” and opened our doors. The reality turned out to be brutal. For the next six months I barely said “Hello” to my customers, constantly busy folding jeans, stickering prices and fetching items to my patiently waiting half-naked customers in fitting rooms. My inventory was a mess, my associates were constantly disappearing, and customers were leaving my store empty-handed after spending 20 minutes to find and try on three items. Whatever happened to my glamorous know it all, hi-tech, data driven life at Amazon–it was gone with the wind and so was my customer obsession. Rent, labor and inventory bills were piling up and the writing was on the wall for my business–I had a few months left to live and I hated my customers.
At 2am on Saturday I still had a pile of denim to sort by size before the store opening next morning. I counted sizes to myself, 29, 30, 31, 32 … there has to be a better way. It was the moment of truth and the last pile of denim I sorted ever. Over the next couple of years, my newly hired team of software developers and I wrote thousands of line of computer code, bringing back memories of early Amazon days. We turned our store into an efficient micro warehouse and a beautiful showroom, empowering customers to shop in-store using their mobile phones. Items wooshed into fitting rooms in under 30 seconds and efficient personalization engine calculated recommendations for our stylists, who would add 20 or more items for customers to try on. As the result, customers were trying on many items, associates were doing a lot less work, my inventory became much leaner, our sales were up and customers praised the experience. We also started to license our technology to other retailers, who were selling not only apparel, but also electronics, toys, home improvements and even grocery in Europe, Asia and US. From working with other retailers I learned one interesting thing–it turns out that all of us, all bricks and mortar retailers, big, small, high-end, low-end, old and new, face similar challenges in store–finding items, personalizing customer experience, controlling inventory, keeping associates on task, etc. And that’s precisely what technology is great at solving and solving at scale.
Just as I did five years ago, sitting on my white couch watching an order for a customer in Indianapolis being fulfilled out of Amazon’s distribution center in Kentucky in real time, I sit on the same couch today, tracking a real Macy’s customer in Los Angeles in fitting room 5. She is trying on twelve bras and algorithms are recommending five more bras for her to try on – whoosh, whoosh, delivered to her fitting room. She is requesting a larger size, associate is on task, picking and delivering the item in under 20 seconds. Recommendation engine adds a similar item in black color. She is buying black. Remind her that we have a promotion going on “buy 2, get one free”. And now she is buying three... Stylist Rosemary just added a camisole. Good call.
My Blue Heeler is getting restless and he is tired of staring at the running list of in-store shopping sessions on my computer screen. He doesn’t want to know what happened to our LA shopper in fitting room 5–he just wants to go for a walk in the rain. We both get up.
Over the next five years, e-commerce retailers will undoubtedly learn how to deliver packages within one hour. But the next retail revolution is going to happen in bricks and mortar stores. Already existing technology will enable stores to create new customer experiences, increase in store sales and beat online cost structure.