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Thanks to tech, stores are evolving into showrooms

Sharon Gaudin | Jan. 19, 2016
IBM predicts that by 2025 many stores will be showrooms with merchandise shipped to customers

As Laughlin noted, "brick and click" have come together.

The changes that Laughlin sees coming will be in how that merging of physical stores and technology evolves.

Brian Kilcourse, an analyst with RSR Research, agreed that the time when some stores will switch to showrooms instead of traditional stores isn't far off.

"I think the demise of the store is close at hand," he told Computerworld. "By 2025, I think the number of stores that have turned into showrooms will be significant, but not a majority… I believe that [will call for] nothing short of a total wall-to-wall replacement of all the technologies they have in there."

According to Kilcourse and Greg Girard, an analyst at IDC, a retailer that wants to move from a traditional store to a showroom will need to overhaul the company's technology and physical infrastructures, such as how it handles warehouses, shipping and inventories.

That would be expensive, and could be overwhelming in terms of time, planning and execution.

Kilcourse said for many retailers, the answer will lie in the cloud. By using cloud computing services, retailers won't need to buy new technology, learn how to use it, set it up and manage it.

"There's no way many companies can afford to do that," he said. "It would be like changing the tires on a car while it's rolling down the freeway. The good news is the solutions, like marketing or pricing or merchandise managing, actually do work. They are very complete and work out of the box, and many are available on the cloud."

For CIOs working with cloud providers to get the technology they need for such a switch, it should be an exciting time, Kilcourse said,

But most companies will have time to make this switch, if that's the way they're heading, IDC's Girard added. "I think IBM is a little aggressive with their timeline. This will be incremental," he said. "We're heading that way already. By 2025, some retailers might only have 10% or 20% of the assortment that they have for sale available for purchase in the store."

Major national or global retailers are unlikely to be making this change in the next nine years. It's too much of a technology change to be done so quickly.

"There will be niche players coming in with this model as their foundational business model," Girard said. "That will be the disruptive force, not the incumbents shifting to this model. For the incumbents, it's not just about taking inventory out of the store, but backend processes will have to be built out to do this. They'll have to know they have inventory at hand. They'll need to know they can deliver it to a consumer at a particular time."


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