The way people can buy stuff changed this week. A Virtual Reality shop opened. VR shopping is an amazing concept... even better than what would happen if the Matrix looped up a Danoz Direct infomercial.
The retail sector is significantly exposed to the risk of digital disruption, and traditional retailers know that new developments will come quickly and be highly impactful.
Australian department store Myer has got on the front foot in a big way, partnering with eBay to roll out the world's first VR storefront. It's a really smart and important development.
As in the previous blog post, I still maintain that bricks-and-mortar will for a very long time be more important by volume than online transacting simply because of human nature. But digital technology will impact on how consumers behave and how companies approach offline transactions.
For years now, social trends have pointed to a couple of things that big brands need to do to stay highly competitive. They need to ideally not look like big brands and not act like them. Consumer expectations for a while now have been developing towards expectations of localised and community-centric brands that provide an experience rather than just a transaction. The challenge is that personalised service is difficult to scale without technological assistance.
The VR store is an amazing development getting towards bridging the difference between walking into a store versus opening up a PC browser. But does it mean physical retail is less important?
Well, also this week, some prime Melbourne CBD retail space was put up for lease. The space became vacant as exiting tenant Telstra focuses on its flagship store just a block away, where customers are handled through a merged digital and standard physical service.
$700,000 p/a rent is the going rate for the empty store. A market accepting this ask is clearly one with demand for actual floorspace. For that price though, a tenant would be well advised to be doing something extra special to draw in passing foot-traffic.
As the VR store unveiling shows, the key to bricks-and-mortar retail success will be increasingly dependent on the use of complementary technology to enhance the underlying physical shopping experience.
Traditional stores will keep going and online only stores will too. It's not a case of either-or.
Real innovation will straddle both at the same time.