The Advertising Industry Won’t Be Useful Anymore
In his provocative new book, Reengineering Retail, expert Doug Stephens argues that the whole point of advertising was to drive people to stores and then help them remember specific brands once they got there.
But with new developments in artificial intelligence (AI) and machine learning, the 60 – 80% of our shopping which is routine, repeat purchases will come to us automatically.
And even new products will be brought to our attention by algorithms that know us almost as well as we know ourselves. We won’t have to go hunt for what we need or want, it will be served up to us — possibly even before we know we want it.
Advertising won’t be enough to break through the stranglehold companies like Amazon will have on most of our buying.
Most advertising agencies now are simply switching money from traditional advertising to digital, but that’s not working, says Stephens.
“We don’t want to see ads on Facebook either.”
People don’t want to engage with brands on social media. Sure you can bribe them into “liking” you, but that’s meaningless. Very few will see what you are doing on your Facebook page or Twitter feed, and even if you force paid advertising on them they resent it.
(Who hasn’t waited impatiently for the 3 seconds to pass so you can click “skip ad” and get to what you really want to see?)
Stores Need a Completely New Model
The advertising industry grew out of a need to drive people to stores, but soon traditional stores will also be a thing of the past, Stephens argues. What benefit will they offer over online shopping, especially as technology makes it faster and easier to identify, find and quickly deliver what you want?
In our interview he proposes turning the store model upside down.
The real reason people go to stores, even now, is for an experience. That experience can be the excitement of the mob at Walmart on Black Friday, or a place where teenagers can go to avoid their parents.
But unless more stores start figuring out how they can offer experiences people treasure, even the advertising industry can’t save them.
Retail Metrics Need to Change
Becoming a place where people go for experiences that can’t be provided online — experiences that are memorable and make you want to come back — may mean that stores are no longer about selling.
Products become secondary to the experience, and whether you buy them at the store or later online won’t matter.
So our current focus on sales per square foot no longer makes sense.
Stores will be about curating, community and story telling.
And, says Stephens, brands will pay stores to create those experiences, regardless of how little product gets sold in the store.
You may also enjoy my earlier interview with Doug Stephens, about his book Retail Revival.