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New deals with retailers are signs of the future

New deals with retailers are signs of the future

Paper or plastic? Decaf or regular? Some choices in life are binary. Yet for retailers, few things are that simple, with the past several years having produced an unprecedented blurring of boundaries. Retailers have become manufacturers. Traditional manufacturers now sell directly to consumers over the Web. And some retailers have made their packing and shipping operations available to other retailers.

Technology company partnerships with retailers are just another manifestation of this trend. While recently announced partnerships between America Online and Wal-Mart, Microsoft and Best Buy, Kmart and Yahoo as well as Microsoft and Tandy may seem surprising at first, they're just the early signs of a pattern that will change the way we think about shopping, with technology at the center of it.

Soon, hybrid retailing that brings together the Web and conventional retailing will become the norm rather than the exception.

The much ballyhooed `virtual versus. bricks-and-mortar' war was never that simple. The advantages of Web shopping (unlimited selection, instant price comparison) and those of physical shopping (see it, feel it, try it on, then take it home) work best when combined. Imagine having the ability to shop on the Web quickly and efficiently and then, seconds later, having a sales assistant hand you the item. Retailers are already beginning to bring the Web's advantages right into the store. Last June, a National Retail Federation committee published a paper, The Five Phases of Retail Business-to-Consumer Web Presence, that describes how retailers will integrate the physical shopping experience with the Web.

The first three stages reflect the world as it can be seen today - from a brochure site that sells only a few items, to a full-blown commerce site that's integrated with the back office. But stages four and five reflect a hybrid world. Stage four describes the `Webified' store that brings IP connectivity to point-of-sale terminals and allows customers to buy the company's full range of merchandise, whether it's in the store or not. Finally, stage five addresses the integration of manufacturers' systems, enhancing replenishment and providing up-to-date product descriptions.

Strategic alliances such as AOL/Wal-Mart and Microsoft/Best Buy take this paradigm to a new level. These partnerships promise to afford customers a new level of ease and service. They'll make technology easier for senior citizens to buy, as well as for others who are just beginning to go online. They'll strengthen the brand names of physical retailers among the digerati. They'll bring online shoppers into stores and physical shoppers onto the Web. They could also help foster broadband technologies, which many believe are necessary for the full flowering of business-to-consumer commerce.

This should be a win-win situation for the partners, but it's only the beginning. While pundits ponder whether the future of shopping lies on the Web, many retailers are exploring the potential of integrating a variety of handheld devices into stores' IT architectures. For instance, store associates wielding handhelds can check a price or determine whether an item is available on-site.

But imagine the possibilities for customers wielding handhelds: Couples planning new kitchens could announce their interest online, wirelessly, as they enter a home-improvement store. Time-starved customers entering an unfamiliar mall could quickly determine where the greeting card store is. A store could push information on sales at new buyers over the Web, even into their handheld devices as they drive or walk by. Valued `frequent shoppers,' who would otherwise look anonymous as they enter a store, could be lavished with attention as they arrived.

So as you review your holiday shopping experiences, consider the possibilities for the future. AOL, Wal-Mart, Microsoft, Best Buy and others have. They've seen the future, and it's a blur.


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