How much is your time worth?
The growth of a consumer convenience culture and where it may take us next.
The COVID-19 pandemic accelerated it, but change was already afoot. Retailers, restaurants, and mom & pops are all offering a collection of convenient options for customers: pickup in store, curbside pickup, ship from store, and time definite delivery. And customers are eating it up.
Readily available technology, low implementation costs, and simple UIs make the barrier to entry relatively low. And a growing mix of delivery service partners, all capable of seamless integration, put even the smallest business in the mix.
With this growing consumer demand for convenience, what should we expect next?
First, we must understand that these models work best at scale in either volume or margin (or both). Retailers with large market share and/or high margins have an advantage, able to offset some of the technology investment and transactional costs associated with gig-employees and platform services. But the rising costs of labor, fuel, and manufacturing will force companies to find operational efficiencies as well.
Efficiencies mean new operating models. So, what can we expect to see on the horizon?
Grocery stores & big box retailers will start to look and function more like warehouses. Algorithms will determine where to best stock items, creating and optimizing traffic patterns throughout the store. Essential items like milk, eggs, and bread located in the back of the store, making that impulse buy more probable – that’s intentionally inefficient. Especially if you’re shopping for someone else. But don’t worry, if you are a traditional shopper, AI will track your purchases and location in real time, making plenty of suggestions for you along your route.
We’re likely to see some retailers swap traditional front of store and back of store space, with much of the actual shopping being done behind the wall, by gig-shoppers, in the “warehouse”. Traditional shoppers will browse slimmed down storefront versions of their favorite merchants. Less space and smaller shelves require continuous restocking. Conveyors and robotics will take care of that.
Stores that have moved past the tipping point, where gig-shoppers now outnumber traditional shoppers, may close, relocating to industrial parks, away from pricey commercial real estate. Why spend marketing and real estate dollars on customers that aren't buying anything?
Continued investment in digital shopping experiences powered by 5G, AI, IOT, AR, VR, will grow exponentially. Gamification of tasks for employees, customers, and gig-shoppers are possible and probable. Apps will become immersive worlds designed to help customers quickly build shopping lists, navigate the aisles, locate their items, and digitally check themselves out. Expect these apps to link seamlessly across retailers and social networks, collecting more big data and advertising revenue along the way.
And why go through all this change and investment?
We are in the middle of a shift in consumer behavior, where brand loyalty and purchasing power are directed towards companies that make it easy for the customer to do business. One-click easy. On-Demand easy. Stay at home easy. Retailers need to adjust operating models to accommodate a growing generation of consumers that value convenience over connection. A generation that wants to engage digitally on their schedule, with as little effort as possible.
Which leads me to a deeper, more philosophical question: How much is our time worth?
For consumers, you have to ask - What is the value of someone else’s time in service to you? Are we broadening socioeconomic divides further by fueling a market based on the needs of those who can afford the luxury of reclaiming their time, with those that forfeit theirs in support? Are we turning into digitally recluse society, with broad, yet shallow social circles and limited physical interaction?
For Retailers, the math is easier. But the impacts are equally meaningful. Time equals money, profit. Quicker, simpler experiences drive higher engagement and sales revenue, and increase margins. Digital will replace physical, creating a labor shift toward higher skilled jobs. This change also introduces a growing vulnerability to new technology and start-ups, both potential disruptors. As consumer loyalty evolves to be more transaction based, retailers will be left exposed to new entrants in the market with fresh ideas, slick marketing, and lower prices.
But think of the upside. What will our lives be like when we reclaim all this time? How much more productive could we be? What new hobbies could we pick-up? How much more online shopping could we do?