i3 - September/October 2017 - 38

Policy

I N N OVAT I O N R E TA I L

Sucharita Mulpuru
Disruption in Retail

 R  

etail Industry Analyst Sucharita Mulpuru recently gave
a presentation to CTA's Retailer Council on Emerging
Trends in Retail and Logistics. She previously was chief
retail strategist for Shoptalk. She also served as vice president
and principal analyst at Forrester Research. Mulpuru helps
retailers reimagine their businesses, build profitable growth
and embrace the marketplace model.

Q What is the current retail CE landscape?
A Consumer electronics is so device driven.

The device that matters more than anything
is the phone. What we have seen is essentially
the shrinking of the store because the place
where most consumers are purchasing
their phone tends to be a smaller format
store whether it is a carrier store, an Apple
store or a Best Buy mobile store. It is more
of a challenge in the rest of the CE ecosystem. A lot of that is a commoditized race
to the bottom. I am waiting for more device
innovation because that is really where the
biggest opportunities are for CE.

Q Is the smartphone impacting retail?
A The phone is the best self-service

automation tool. The phone answers almost
every question you have. Ultimately, we will
probably see something along the lines of
the Apple Store on your phone or an app
where you can scan and checkout. It is still
early because I don't think that retailers
have figured out loss prevention for that
yet. The Amazon Go Store is also a model.

Q Is there consolidation in retail?
A I would argue that there has not been

enough consolidation. Acquisition has
not typically been a retail strategy and it
absolutely should be. I don't know if it is
because so many are mired in debt so they
don't have the luxury to acquire but that
is their path to the future. Retailers are still
caught up in the traditional model - a buyer
has to put a PO in for tens of thousands
of units and wait six months for the product
to show up at the distribution center.
They need to be more nimble.
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SEPTEMBER/OCTOBER 2017

Mobile Retail Behavior
What did you do when you researched
products/services on your mobile phone in
the past 3 months while not in a physical store
(e.g., at home, at work, on the go, etc.)?

Compared prices

52%
Looked up product information

47
Read customer reviews of a product

44
Searched for a coupon

39
Located a nearby store or to check store hours

32
Checked availability of a product in an online store

30

SOURCE: Consumer Technographics North American Retail & Travel
Online Benchmark Recontact Survey 1, Q3 2016 (US)

Q How can retailers meet customer's
expectations set by Amazon?
A While everybody would love to get
everything really quickly, very few people
are willing to pay for it. Amazon has set up
distorted expectations because they do
fast delivery and they don't pass the cost
on to the customer. But they have managed
to find a business model to make that cost
effective. The vast majority of transactions
still take three to five days to deliver, including
Amazon transactions. Prime Now set the
expectation but even some Prime orders
don't get delivered in two days. The interesting thing about the returns research is some
people don't shop online because returns are
a frustrating experience. Very few companies
have differentiated themselves on a more
seamless returns experience so these are
places retailers can focus on.
Q Will drones be used for deliveries?
A What Amazon did brilliantly is it

showed what a drone delivery could look
like and captured the imagination of people.
But the reality for that to really come to life
has more questions than answers. We have
no regulation around who is allowed to
deliver by drone and in what circumstances
and in what part of the airspace, under
what types of conditions, what time of day
- so that needs to be thought through.
The federal government can regulate to
some degree but cities and states are going
to ultimately decide. The biggest concern
is how does the drone know where to
deposit the package? It could be disrupted
by anything from telephone wires to trees
and there is no infrastructure to receive
packages. If you are in suburbia and you
have a yard, it may make sense but what
about a condo? Also most drones can only
go five miles so who is located five miles
from homes? FedEx possibly, UPS stores,
maybe Walmart, Target, Walgreens or your
grocer. You won't see drone deliveries for
groceries because that weighs more than
five pounds. Drone delivery could make
sense for pizza. Dominoes is everywhere,
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