Google’s move into retail

Last week’s blog was the final instalment in my three-part series on the Retail Trifecta. It talked about investing in store associates to create a great experience for shoppers, so that they increase their dwell time and the amount they spend in store.

I made the important point that store associates, and the service they provide to shoppers, are the key point of difference between the traditional retailer and pure online retailers. So why on earth, if the rumours are true, is Google apparently planning to open freestanding retail stores in the United States?

Let’s assume the rumours are true, and the Google “tell, no sell” store-within-store in Curry’s in the UK and Best Buys in the US, as well as Google Brand Ambassador programs in public spaces in malls and transit areas, are the harbinger of new US retail store locations. The question is, why?

I’ve presented at telco and general retail conferences about the role Apple’s former vice president of retail, Ron Johnson, had in harnessing shopper feedback at store level to tailor product development and advertising for Apple.

When Apple launched its first iPod, the marketing team briefed Apple’s ad agency to target 30-something males; loyal tech-heads who loved Mac. Many of you will remember the first iPod ad: the 30-something guy sitting at his Mac boogying to the music from his new iPod. Following its launch however, Apple resellers told Apple: “It’s not being bought by our loyal 30-somethings, it’s being paid for by them, but it’s being bought by their teen kids.”

This coalface feedback led Apple to re-brief its ad agency, and the iPod’s iconic 2005 “black silhouette dancer on a bright coloured background” was born. This insight from store level also kick-started Apple’s rise in its investment of the vertically integrated and now phenomenally successful Apple store, headed and built over a decade by Ron Johnson.

For our technology-based clients the phrase “using is believing” has and always will be true. For our food and drink clients the phrase “tasting is believing” has and always will be true. Brands cannot engender widespread trial until shoppers experience their products. Once they’ve used it, and like it, they will buy again. And with time, all things being equal, these shoppers become brand loyalist consumers. But this process starts in a store, with a shopper meeting an associate who can demonstrate the product confidently.

So, with this in mind, back to Google. I’d love to claim that my retail prescience saw this coming. It didn’t. But Google’s move into retail does make a lot of sense. In the late 90s, Intel tried and failed to launch branded Intel products. The venture failed because the brand had no retail network to work with. Google has clearly seen how Apple has harnessed face-to-face relationships with shoppers to build trust based on them enjoying a great experience in great stores with great store associates, and is trying to do the same.

So, what will success at retail level look like for Google three years from now? Perhaps we’ll see volume purchases by traditional retail store shoppers who aren’t “Android-loyal 30-somethings”.

As CROSSMARK CEO, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia and across the world. His international career in sales and marketing has seen him responsible for businesses in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands.

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