Friday, November 30, 2012

Hointer Takes Amazon Ethic to Brick & Mortar

An ex-Amazon exec has taken her expertise to a brick and mortar start-up, and there is much to admire.

Nadia Shouraboura is standing nearby, listening closely, smiling big. This scene in front of her is exactly why she decided to leave her comfortable job as an Amazon exec. It’s why she invested $5 million of her own money. And it’s why she thinks — no, she knows — that her innovative apparel store will revolutionize the way we buy clothes.

For a total of $10 million.  I think that is too much to test what is a hypothesis.  It is dangerous to think we "know" anything.  We can only form hypotheses and test them.

The focus on men is based on the simple fact that shopping is an arduous chore for most guys. They’d rather be efficient with their shopping, and Hointer gives them that with a tech twist. 

Retail is theatre.  This may be enough theatre to sustain the model.  A minimalist, hi-tech performance.  Maybe so... but on-the-spot checkout has been done.

“It is strange how little the traditional shopping experience changed over time,” Shouraboura said. “With all the technology innovations, we still dig through piles of clothes, search for the right size, lug stuff to fitting rooms located in the back of the store, wait in lines at checkout counters. Why?”

For the same reason we pump our own gas now.  To save corporations the cost of serving the customers.  Make customers serve themselves.  It wasn't always thus, I can remember when retail was entertaining, the sales clerks professionals and the service enjoyable.  Walmart started in the 1950s, so that model I do not think is "traditional" unless one thinks the universe began the year one was born.

If you don’t like the jeans or they don’t fit, simply throw them into a bin and they will automatically be removed from your shopping cart. You can request a new size or new style directly from the dressing room as well. It’s unlike online shopping, where a customer would have to re-package an item, send it back to the retailer, then wait even longer for a replacement.

OK, so it is self-service, and it beats the experience of inbound freight on a pair of pants, send back for right pair, outbound freight, and then more inbound freight.  Hointer will save that time, trouble and cost.  Or not.  What if customers simply use Hointer for showrooming?  Get the exact right size at Hointer, then go online and order the cheapest price?  Hointer may beat the price of the uncertainty of buying jeans online, but next they have to beat the price of buying jeans online with no uncertainty.  It seems to me Hointer is going after a market where ecommerce is strongest.  Admirable!

Hointer brings advantages for both the customer and the brands. Shoppers can either buy a pair of jeans within minutes, or discover new apparel for hours with the easy-to-use Hointer app. The design of the store requires less floorspace and fewer salespeople, which in turn allows Hointer to offer low prices and carry more stock. The app allows Hointer to track everything in the store in real-time and lets customers rate clothing. Brands can then access that data via Hointer’s portal to see which apparel people tend to try on and not buy.

Feedback to vendors is gold and Safeway sells this to its vendors.  I hope Hointer is doing the same.  I wonder, when you add in backstock space, how much less floor space is needed.  And competing on price I guess is necessary, since they are up against the online option.

All mass merchandising may go this way in time, since electrons are cheaper than people.  But after the novelty wears off, this will have all of the charm of pumping your own gas.

This makes the old-fashioned tailoring shop all the more valuable.  I've been watching one such shop in San Francisco thrive over the last decade or so.  You don't need $10 million to start up.  Just customers.

Feel free to forward this by email to three of your friends.


Callum said...

This is not a new idea. The founder of Banana Republic, Mel Ziegler, tried this concept in the late 90s and the venture went bankrupt with the dot com boom.