Innovation in Retail: Virtual “Brick and Mortar” Stores

Happy New Year! My most popular post so far has been about Tesco bringing grocery shopping to Korean subway. Here is another example of retail innovation (hat tip – Benn Konsynski). Yihaodian a Chinese company using augmented reality to build a 3D virtual store. Their stores exist only on a smartphone screen, but otherwise it’s a fully immersive experience.

Interestingly, customers still need to go to a store, augmented reality works only at specific locations. At first, it seemed odd – why limit consumer experience? Perhaps the company is betting on association with the trendiest locations. Another reason why Yihaodian is doing this might be studying how consumers move about the store and applying it for improving store layout. Given Yihaodian’s effective merger with Walmart, I would not be surprised if the virtual store browsing data is applied for traditional brick and mortar store design.

Innovation in retail: How do you bring a grocery store to people?

The picture to the left is actually a storefront of Tesco in Korean subway. Watch the video to see how it works – the idea is pretty neat: you put a full size picture of store shelves, it serves as an ad, and it connects shoppers to the online store. Nothing else changes, customers are simply given another more convenient entry point to the online store. If Tesco can also put an interactive screen displaying price promotions there, the shopping experience will be almost as good as in a real store.

Hotels without rooms – car rentals without cars

Managing risks in operations is important. And as my colleagues Serguei Netessine and Karan Girotra say –
if you can manage risk successfully or get your customers to pay for it, you should take more of it. This is after all where the opportunity lies. Some companies actually go even further – they try to eliminate risk completely. How?