In today news we learnt, that Google is likely going to follow Apple, Blackberry and Microsoft with opening stores in malls. Google has tested this strategy already in Dixon's outlets in the UK and some Best Buy outlets in the US. Mainly for promoting the Google Chromebook.
And it seems to be intuitively right - as numerous Apple Stores have shown, hand-holding the consumer is key to brand loyalty and product success. Likewise Google should do with their Nexus phones, tablets and the Chromebooks.
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10 years ago nobody would have expected to see anything even remotely close to this. Profit margins of retailers are traditionally razor thin, operations are complex (see Apple's issues with time management and overtime) and should be dilutive to share price - compared to the profit one can wring out of, say the search business (Google), the high end consumer goods market (Apple), software business (Microsoft) and even handset and OS making (Blackberry). The trick is to provide a high end brand and price strategy coupled with excellent customer support. The outlets are not a Tiffany's or Hermes store - but will beat most other retailers in sales per square foot.
Could a retail presence be interesting for enterprise software vendors, too? When reading the news I sheepishly asked this morning:
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Google's move was also spotted by SAP's CMO - Jonathan Becher (@jbecher) and I was able to get into a short Twitter conversation with him on this (and kudos for a responsive executive!) :
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So physical stores are not be seen in the near future of SAP... but digital stores in physical locations? Which begs the question - what is a digital store? Google Image searches mostly show physical retail stores:
Or maybe a digital store is an apps store like we know them from iTunes, or Google Play? Possibly - and then based in kiosks in the malls.Or how does an apps store get a physical presence? Guess we will have to wait for the SAP retail strategy to pan out.
It's worth noting that both Oracle and SAP have dabbled in kiosks - anybody flying out of SFO's United Terminal will have seen them in the last years, they came and left. As we haven't seen more of them, I assume the strategy wasn't too successful and maybe only spurred by one-upping each other in the hyper competitive years between the two companies.
But a high frequency retail presence could make sense for an enterprise software vendor, here are a few reasons:
Alright - some far fetched, I agreed. But consider this: SAP has an ambition to reach 1B (Billion) users in the next years - that will only be possible with some consumerization of products, which leads to "digital stores in physical places" as mentioned by SAP CMO Jonathan Becher above..
Crazy? Maybe - care to comment - please do so!
And it seems to be intuitively right - as numerous Apple Stores have shown, hand-holding the consumer is key to brand loyalty and product success. Likewise Google should do with their Nexus phones, tablets and the Chromebooks.
10 years ago nobody would have expected to see anything even remotely close to this. Profit margins of retailers are traditionally razor thin, operations are complex (see Apple's issues with time management and overtime) and should be dilutive to share price - compared to the profit one can wring out of, say the search business (Google), the high end consumer goods market (Apple), software business (Microsoft) and even handset and OS making (Blackberry). The trick is to provide a high end brand and price strategy coupled with excellent customer support. The outlets are not a Tiffany's or Hermes store - but will beat most other retailers in sales per square foot.
Could a retail presence be interesting for enterprise software vendors, too? When reading the news I sheepishly asked this morning:
Google's move was also spotted by SAP's CMO - Jonathan Becher (@jbecher) and I was able to get into a short Twitter conversation with him on this (and kudos for a responsive executive!) :
So physical stores are not be seen in the near future of SAP... but digital stores in physical locations? Which begs the question - what is a digital store? Google Image searches mostly show physical retail stores:
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| Apple Digital Store in Manchester - top Google hit for Image search for 'Digital Store' |
Or maybe a digital store is an apps store like we know them from iTunes, or Google Play? Possibly - and then based in kiosks in the malls.Or how does an apps store get a physical presence? Guess we will have to wait for the SAP retail strategy to pan out.
It's worth noting that both Oracle and SAP have dabbled in kiosks - anybody flying out of SFO's United Terminal will have seen them in the last years, they came and left. As we haven't seen more of them, I assume the strategy wasn't too successful and maybe only spurred by one-upping each other in the hyper competitive years between the two companies.
But a high frequency retail presence could make sense for an enterprise software vendor, here are a few reasons:
- Vendors could use their stores for education purposes:
Check out that new user interface, see the latest release, learn more some features, offer certifications and trainings. Or: - Ask your SAP Genius on how to get that material code propagated.
- Ask your Oracle Guru how to close that book in e-Business suite faster.
- ...
- It would create a point of presence for customer service:
With new cloud based software architectures, new service strategies could be brought to the mall: Bring in your iPad so we can install the newest SAP mobile client, upgrade your old Business Objects Explorer... all while you shop somewhere else.
- It's a non threatening entry point for competitive strategies:
With standardized APIs, guerrilla marketing is in reach: Similar as Dexplora is putting an new UI on top of salesforce.com - why not look at your Oracle or SAP system through a new (Workday anyone) UI? (I know this far fetched and a lot of heavy lifting has to happen in the background, but Dexplora shows, how that can work).
- Float the trend:
We are all witnessing the 'consumerization' of IT. Nothing embodies thinking this process through all the way than finding yourself in a mall, where consumers are present. Why not be present there, too - a consumer is usually also a worker that somehow uses an enterprise application.
- Could this be the DTC for enterprise software - DTU:
Similar as the pharmaceutical industry saw a marketing surge when DTC marketing was allowed, enterprise vendors could market directly to the user (call it DTU).
- Brand promotion:
How many employees in the IT field do you see proudly wearing and carrying vendor paraphernalia? Give them a chance to buy it for the whole family at the mall.
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| SAP 2012 Fact Sheet |
Alright - some far fetched, I agreed. But consider this: SAP has an ambition to reach 1B (Billion) users in the next years - that will only be possible with some consumerization of products, which leads to "digital stores in physical places" as mentioned by SAP CMO Jonathan Becher above..
Crazy? Maybe - care to comment - please do so!