Saturday, April 7, 2012

Store Concept: Acting Like an Online Store

tortilla chips
Something crossed my mind the other day when I was in a grocery store and was looking for a specific brand of tortilla chips. When I arrived in the chip section, I saw the no salt, garlic, and other weird varieties instead of my coveted plain-jane sea salt crisps. Then I remembered that the hispanic section also had my tortilla chips, so I walked over and found only two left, awesome!

This reminded me of the days of working at Wal-mart when I was a student, people would always ask me "Well do you have any in the back?". The infrastructure allowed me to scan the barcode on the shelf to get an inventory of the product in which I could say, oh I see there are two left, but I have no clue where those two are. Maybe someone shoplifted them? Maybe they are sitting in a pile of basketballs? Or maybe they are sitting in a box exactly where they should be? ...I always went in the back for a couple minutes and returned without an answer.

A store has a general idea of how much inventory they have, but everything is quite unaccounted for. Add in the fact that customers move things to the wrong sections, shoplift, drop/damage goods, all before they pay for the item and that kind of messes up the whole idea of keeping things smooth.

But then there is the internet, a place where you shop around one item at a time, add things to an e-cart, pay for everything up front, and then get it at a later date. Why can't physical stores act like electronic ones?

Before I begin, usability is key so I want to mimic the idea of a store with shelves, registers to checkout, everything looking and feeling the same.  Research has shown that people like things to be familiar, consistent, and comfy: in usability terms an idiom.  So here are the key differences:

1. When you enter there are no carts, no baskets, and no need; all you need is your smart phone.

We are moving towards a future where everything is done with your phone. Your phone now has the ability to scan barcodes, do Near Field Communication (NFC) data transfer, and bluetooth connections, all while having access to the internet.  Think of it as Bring Your Own Device (BYOD).  And in case you happen to be the 50% feature phone population, fear not since there will be simple scanning devices available for your use in the store. When you enter the store, you would simply open the app on your phone or scanner which would assign you an "e-cart" for your time in the store.

2. The shelves are empty, actually they are displays.

Imagine now that every aisle and every shelf actually isn't a shelf anymore, but a display! The product that used to sit there, is still there figuratively. The display looks like a shelf full of products and even has the price tags. All you do when you want an item is scan it with your phone. This idea also allows for dynamic updates to the inventory; I would imagine the item graying out when its out of stock to let the customer know. The displays also allow for programatic updates for adding new items, removing old ones, changing prices, changing labels, etc.

An important note: these two features immediately make way for a lot more room.

A store with no carts and thin walls of displays with no inventory... What do we do with all that room?

3. Checking out is now simply paying for your e-cart, no more waiting and scanning!

You did all the scanning as you shopped, why should you have to wait again? Checking out would simply be a kiosk where the cashier handles the final transaction and you receive your goods.  Lines would be just people, no carts, and fast.  Ideally all of the checkout lanes would be self-checkout kiosks which makes room for a lot more of them to handle more customers.

4. All the inventory is stored in the back for attendants to handle.

Take the idea of warehouse guys, combine with stockers/inventory people, and finally add in the checkout bagger and you get what I refer to as attendants. In our ideal world, attendants would actually be robots. Every time you scan an item, the attendant finds it and even bags it. Once they get the command that you completed your transaction, the attendant brings the order to the front and sees you on your way out.

So what are the payoffs?

+ Technology is the future

The upfront cost is huge, but it's the future. Heavily relying on technology is the only way human kind can move forward as more efficient and satisfied people. Replacing shelves with displays, inventory systems integration with store apps, adding scanning devices for customers, it's all a large investment with an even larger payoff.

+ Store layout

Aisles are no longer cluttered, shelves are no longer disorganized, inventory management is a simple single location (no more front vs back room). This allows for a focus on the customers and the products and allows for an organized presentation of the store (think website design).

+ Team dynamics

This will change team dynamics in a whole new way; less time is worried about managing the store/inventory and more time is spent managing customer experience. Instead of keeping supply up with demand, keeping the store organized and presentable, and of course "checking the back" for a customer, time is instead invested in customer satisfaction. Inventory workflow is smooth, lines are fast, and people can finally breathe!

This concept can also include endless features:
  • e-cart building from previous visits
  • Lookup product info when you scan an item
  • Built-in couponing and advertisements
  • Pre-ordering and picking up at the store
The list goes on.  Feel free to add onto the idea or to tear it apart.  All I know is that 10 years from now when I'm surrounded by a lot of really smart people, I might be revolutionizing the way we do shopping :)


  1. this is a very nice idea. retail stores owners have to have a huge investment at first but when things runs smooth they will have good pay-off as what you said. i think, even a wall-mart size store can be run with much fewer staff.

  2. Nice idea, but low-tech versions have already been implemented. Outlets like Costco in the US do this with big ticket items. You will pick up an empty box or a cardboard token of a big ticket item like a DSLR camera, take it to the register and pay, and then pick it up from the locked cages where the inventory is stored.

    The problem with your model is that the "order processing" part, meaning looking at an item list and putting the items in a shopping bags, will take far more employees. Unlike e-commerce (online) orders, the customer expects their order to be ready by the time they get to the exit of the store, whereas in an e-store, the warehouse has anything from a few days to a few weeks to process and ship the order.

    This means that the store will have to employ many many more employees than it currently does. A big box store will usually employ about 30 people in a shift (as far as I know), with the self-shoppers doing a bulk of the work themselves (taking and putting items in a shopping cart). In your model, the number of employees handling orders at any given time is going to limit the rate of sales, because customers will see the line of people waiting to pickup their orders, and turn around and leave. This already happens with long lines at the checkout counter.

    An expensive way around this would be automate this completely, with robots picking items from bins and dropping them in shopping carts. But of course, this sort of automation doesn't come cheap.

    - Indika

  3. Now almost everyone have a phone, which has become a living tool. We are moving towards a future where everything is done with our phone. We can use our phones to read barcodes, transfer data , and connecte to bluetooth,it's convenient.