What started as a retail display company in 2004 has grown into the most promising omnichannel platform we’ve yet seen. We sat down with Paul Chapuis, founder of OnQ, to ask about his decision to spin out June20 and where he sees retail heading.
“OnQ has become the leading supplier of retail displays for technology goods. We make most of the technology displays for Walmart, showcasing their offerings of Apple products, laptops, phones and home automation systems. We’re behind the technology displays at Sam’s Club too. Oh, we also own the Apple displays in Costco,” mentions Paul. The natural question is how a display company transitioned into an omnichannel innovator.
“Tech displays are not as simple as one might think. Technology is changing rapidly, and a display needs to communicate the differences and useful functions of technology products to buyers quickly,” delineates Paul. “If a customer finds something too cumbersome to understand, they’re on their phones and leaving the retailer, so it’s paramount we make the displays as engaging as possible.”
This led Paul to the conceptualization of June20.
“In building OnQ we recognized retail was starting to drastically change. A customer, armed with a mobile device, was able to access information that influenced their buying decision. Offline retailers offered part of the consumer value equation, but they were falling behind in other parts. That’s when it made sense to double down on June20 and use what we learned at OnQ to solve these challenges.” OnQ then spun out June20 in 2017.
You’re probably wondering what June20 Converge is at this point. The best way to understand it is to watch a product overview video. If we were asked to put it into words, it would be bringing the value of online shopping offline so the consumer has no need to turn elsewhere.
Paul does a better job of explaining it than we do, unsurprisingly. “Retailers have trouble bringing reviews into stores. Because consumer needs are changing (an estimated 88% of consumers consult reviews before buying these days), retailers also need to change. Retailers can give consumers indispensable information that only comes with seeing and handling a product physically, but they’re missing the other necessary ingredients to push a sale through the funnel.”
This prompted us to pause and ask Paul what he thought retail would look like in the future. After all, it makes no sense to design a product now if the market totally changes.
“If you think about retail historically, it’s been nothing more than a distribution channel. Suppliers needed a way to get their products to customers, and retailers provided that outlet. As the internet blossomed, an entirely new channel opened up; all of a sudden suppliers could reach hundreds of millions of people directly, at very low costs. The internet turned retail on its head.”
“When we think about the purpose of physical retail, it needs to break down into three categories.
If you’re not providing one of these three, you’re in trouble,” Paul laughed.
What about the hoopla around augmented and virtual reality?
“AR (augmented reality) lets technology participate in what a user is doing, but curation is a real problem. If a user looks at something, what pops up? Is it an ad from Google? Does the retailer have any control?” Paul thinks AR is ultimately an excuse that retailers can be horrible at, well, retailing and rely on technology companies to develop an AR layer that makes them relevant. “This is nothing short of a horrible, horrible strategy,” admonishes Paul.
So what does Paul make of the retail apocalypse then?
“Retailers are divided into another three categories. A third of retailers are peddling commoditized goods and are going to die. Another third have a niche – think Safeway or Costco. The last third know what they’re doing but need to make some pretty big changes, like shrinking footprints or totally reformatting their inventory models. There’s $40B worth of investment these retailers need to make over the next 3-4 years to stay relevant.”
Retail, in other words, needs to curate the right items, present the right information, and make it easy to buy. “Retailers have a great advantage that online retailers can’t replicate, at least cheaply. They need to keep that advantage but also copy the advantage ecommerce players have. Retailers need to remain relevant, and Converge helps them do that.”
When looking deeper at the product we asked Paul if other stores didn’t already have something similar. Don’t stores have QR codes that consumers can capture on their phones to look up information?
“Sure,” agrees Paul, “but retailers are basically telling the consumer, ‘Hey, use your own hardware and your own data plans to figure it out.'” The risk, Paul explains, is that you’re giving the consumer a reason to meander to Amazon and use their buying experience instead. “This customer just drove to your store, spent time and money to show up, and retailers are training the customer to leave their ecosystem. That’s insane!”
Converge solves this problem in a pretty nifty way.
When a consumer is convinced they want to purchase something on the Converge device, Converge will send the consumer the information directly a number of ways. If the consumer has the retailer’s app installed, bluetooth connectivity will shoot the information to the installed app. If not, the consumer can input their email or phone number, and Converge will send them the information there.
“Consumers are wary of putting their payment information into a public machine, but forwarding a link to their personal device allows them to make a purchase in what feels like a safer environment.” Moreover, it enables the retailer to collect customer information for reminders and follow up. “If a customer visits your store that is a very strong signal of intent. Capturing customer information in this way helps to guide them through the sales funnel before they’re lost,” Paul points out.
We wondered if Converge will replace employees at all.
Paul told us that, “Well-trained associates would certainly help customers with Converge and prove an even better experience for customers.” But we’re also aware of rising labor costs, particularly from political pressure. In the restaurant industry, many concepts are implementing kiosks to offset these realities, and some are even flirting with back of house robotics. As with most things, the retail market will figure out June20’s place with employees eventually.
Retail isn’t dying… it’s just changing. Those that don’t adapt will die. Paul pointed out that his local Stanford mall is full of new retailers (Tesla, Warby Parker, Bonobos), all of whom are offering a unique experience. “These companies are providing useful experiences for consumers and changing the traditional retail model. Why have 10 boxes of 10 sizes of shoe in the back of your store when you can have one of each size on-hand for sizing and ship a customer’s order from a warehouse in 24 or 48 hours? You can’t even buy items at a Bonobos store.”
And these retailer changes seem to be working. “You won’t find a parking spot at the mall in under 45 minutes!” Paul jokes.
In the meantime, you can see June20’s Converge in action at Home Depot’s Store 1777, or even Sam’s Club’s flagship Bentonville, AR location.