Ron Johnson, known for successfully building out Apple’s retail operation and subsequently failing to resuscitate J.C. Penney, is launching a new venture that injects pure-play online retail with high-touch service. Enjoy will sell a limited selection of higher-end electronics, delivering them for free and then helping to set up or install products for up to an hour. The company is partnering with companies including AT&T (gaining entrée to its Apple products), Microsoft and Samsung. While Enjoy will avoid the expense of a brick-and-mortar infrastructure and will reportedly keep inventory low, it will incur significant labor costs. “Our product is a person,” Johnson has explained.
As noted in L2’s Digital IQ Index: Big Box report, today’s consumers expect a free-flowing “buy-anywhere, fulfill-anywhere, return-anywhere” marketplace in which purchases originate in one channel, are completed in another, and tended to (by customer service) in a third. L2 believes businesses can no longer compete in one channel alone and thus are rushing to offer an array of omnichannel options. This includes e-commerce giant Amazon, which is unlikely to remain a pure-play online entity given that an accessible retail footprint has become a distinct advantage. With the proliferation of smartphones and the rise of cross-shopping behavior, sales that start on a digital channel and conclude offline will account for 59 percent of U.S. retail sales by 2018 — four times the sales attributed to direct e-commerce.
Enjoy will compete with omnichannel role model Best Buy, which offers service calls via its relatively low-cost Geek Squad operation. Without a physical presence, Enjoy seems to be banking on some customers showrooming at the stores operated by its partners, as well as at retailers like Best Buy or Apple — a risky proposition, since research suggests that more American consumers “webroom,” or research online and convert in-store (69%), than showroom (46%). The company also seems to be betting on a continuing pipeline of consumer electronics that are sufficiently complex to set up and enough consumers unable to work out the details on their own.
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