01 Dec 2017
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2017 in Retail: Voice-Activated, One-Hour-Delivery Shopping

by Ron Johnson (MBA 1984), founder and CEO, Enjoy

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Technology is changing everything about how we shop. Two decades ago when we needed something, we went to the store. That’s what we’d done for hundreds of years. Then we began to turn to the computer. Now shopping means reaching for our phones; today, over half of all online orders begin on mobile devices. And this year, we started using our voice to shop. Amazon launched that trend with Alexa, and recently Google and Walmart announced they are teaming up to do the same thing.

We are in the early days of this digital commerce—it has only been 23 years since Amazon launched its bookstore—but innovation is accelerating rapidly, and means big changes and challenges for the sector.

We are seeing rapid changes both in traditional retailers and in startups. The largest traditional retailers are investing heavily in their online shopping capabilities, and many are making tremendous progress; Walmart and Amazon are in the middle of an epic competition that is going to be thrilling to watch. The startups that have been most successful have targeted a specific category—Peloton in exercise, Casper in mattresses, Warby Parker in eyeglasses—and focused on product quality, experience, and brand building. The losers have been the middle-of-the-road retail strategies—JCPenney, Kohl’s, Gap, Abercrombie & Fitch—and the shopping malls they occupy. Their business models are completely outdated.

Customers want convenience, they want speed, and they want help. Five years ago, they thought getting a package delivered in a week was fast. Today, it’s not uncommon to have products delivered within hours. And in the future they are going to want more than a thud at the doorstep. They are going to want a person to go through the door to assist them with the most important purchases they make. It’s a great time to be a customer.

What’s next in retail?

“The mall is in big trouble, and that’s a catastrophe for local communities that rely on malls for employment and taxation. Mall operators have to start thinking about who their real customer is; they used to think the real customer was the retailer. They also have to consider the most relevant use of their space for the community in which they operate. Malls now have the opportunity to embrace technology, not fear it. Augmented reality and virtual reality can reenergize the brick-and-mortar retail environment.”
—Professor Rajiv Lal

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Featured Alumni

Featured Alumni

Class of MBA 1984, Section B

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