Why Is Retail Still Stuck in 1976?

Woman shopping for dress

When I was about ten years old my mom used to take me to a Macy’s department store on Saturday mornings. We would walk around and around. She would try stuff on or make me try stuff on. There were always counters where special items were on sale. She would always buy something. And when she did we would go to the counter and she would pay with her credit card. The store assistant would wrap things up in a Macy’s bag. Sounds excruciating, doesn’t it?  Oh, it was.  But at least I would get ice cream on the way home.

I’m now 51 years old. Last Saturday I went to a Macy’s department store with my wife. We walked around and around. She tried stuff on and made me do the same. There were counters with sales items. She bought a few things. She used her credit card. Everything was put in a Macy’s bag. Still excruciating?  God, yes. But I made sure to get some ice cream so the afternoon wasn’t a total loss.

No, this is not about ice cream.  It’s about something else.

Macy’s (NYSE:M) releases its earnings this week. As does Nordstrom (NYSE:JWN), Kohl’s (NYSE:KSS), J.C. Penney NYSE:JCP and its other department store competitors. These are all old-school, well-known names in the retail industry. And they’re all struggling because they’re facing online merchants that are eating their lunch and a new generation of Millennials that are (justifiably) demanding a different kind of buying experience in 2016 than the one I suffered through in 1976. But they’re not getting that. Walk into any department store today, then jump into the “Hot Tub Machine” and go back 40 years and you’ll be unnerved by the similarities. Nothing’s really changed.

What happened to the promise of retail tech? Why is retail still stuck in 1976?

Where are the promised “beacons” that will notice me as soon as I walk into the store and alert my mobile device with bargains and offers based on my preferences and prior purchases? Why are the shop assistants still standing behind counters and cash registers instead of roaming the floors with tablets that are not only ringing up sales but recommending accessories and other items based on my preferences? How come, with all the talk of Apple Pay, Android Pay, PayPal, Square and Samsung Pay I’m still whipping out my old-school credit card every time I want to make a purchase? And why is it that, even with all the new chip cards and warnings from the credit card industry, I’m still swiping like my mom did decades ago? Wait – what happened to the promise of those RFID (Radio Frequency ID) tags that would be attached to every item for instant inventorying and checkout through a scanner?

And that’s not all. Why are there still advertisements in the newspapers (newspapers?) like there were in 1976 but no coupons or special offers sent to my mobile device automatically? Or QR codes with video explanations in every department? How come I can’t buy an item on the store floor from a kiosk and have it delivered to my home that day instead of trudging around the mall with it? What about the promised in-store mapping where impatient men like myself can get directions to the items I want immediately so we can get back home to Sports Center?

None of this is happening yet. Wasn’t this supposed to be the promise of retail tech? I know all of this technology exists. And there have been many news reports over the past few years that retailers like Macy’s and Target were putting these things into place. And maybe all this location-based technology is secretly happening behind the scenes and the data geniuses at these stores are analyzing great quantities of information about shopping behavior with it. Maybe. But as a consumer I’m not seeing it or benefitting from it and, given the industry’s financial struggles of late I’m pretty sure their investors aren’t either. Maybe the technology is over-hyped. Or maybe it just costs way more to implement than expected. Maybe retailers are scaling back on their technology plans in this era of decreasing profits and tighter margins. Or perhaps the return on investment has been too optimistic.  Maybe it’s all of the above.

Whatever the reason may be, it’s killing the industry. I don’t see any merchant doing this – big or small. Instead I just see more and more customers buying their products online because it’s faster and easier and the competent online merchants (yes, you know who they are) are doing a better job at targeting their best customers, recognizing them when they’re shopping and rewarding them for their loyalty. Some may see this as a brick-and-mortar disappointment. But others, particularly smaller merchants, may see this technology gap as a potential opportunity to stand apart from their old-school big-box bigger competitors and offer a better experience that the big guys are not able to deliver right now. Maybe.

Or maybe all of these merchants will just keep delivering the same shopping experience that I had back in 1976. If that’s your strategy then I strongly recommend offering some ice cream too.