Getting Ready for the Next Big Thing

Twenty five years ago, I invited a team from P&G to Apple’s Special Systems Division in Cupertino, California to take a peek at the future of computing. In Cupertino, we viewed a video tape (VHS, of course) called Knowledge Navigator which showed a handheld notebook with a camera, telephony and interactive video. We didn’t know it, but we were viewing the first incarnation of the iPad. And this was before there was an internet, and cell phones just made phone calls. (You can now find this video on YouTube.com)

This year UPS published a study called UPS Pulse of the Online Shopper. This study triggered the fond memories of massive changes like Apple showed in Knowledge Navigator circa 1989. Think about these highlights  that should provoke your own evaluation of how you and your company will adapt.

For example, look at all the retail building that is now underway. Real estate studies show that there is enough retail space in the U.S. to accommodate a population of 900 million people. We continue to build, yet online retailing grew 7x faster than offline and achieved 10% share of discretionary spending last holiday season. Especially for the male gender, online shopping has created last-minute saves for anniversaries, birthdays and special occasions without requiring a trip to the dreaded mall.

Now that consumers can go direct to the source via online, how will companies compete? Customer experience will dictate the winners and the losers. Who would have thought you could sell shoes online? Sequoia Capital wouldn’t believe it in 2001 when Zappos was looking for investment. Who would have thought next day or even same day delivery would be important? If you have the choice of getting it today or next week and the pricing is the same, what would you choose?

Shoppers want more control in their purchase including the ability to order online and pick it up in a store, flexibility in choosing delivery dates and times, and the ability to reroute packages. Amazon and others have set the bar with free shipping (Is Amazon Prime really free? Well it is after you join!) And we also would like to track our packages in real-time and send our returns back for free.  This is becoming the new normal.

Online shoppers also value what other shoppers think. Over 90% of the respondents to their study have recommended online retailer to others. These shoppers are value conscious with many of them bailing out of their shopping cart because the shipping price is too high relative to the price of the goods and many of them choosing ship to a store to avoid delivery costs.

Mobile is playing a significant role, with shoppers using electronic promotions and coupons delivered to their smart phone or tablet. Location based offers driving traffic to stores will increase the value of presenting a robust mobile presence to consumers.

I’d like to visit Apple’s inner sanctum again and see what the sequel to Knowledge Navigator has in store for us.