Scott Galloway on the Death of Pure-Play Retail & Impulse Buys

At L2’s members-only “Clicks & Mortar” clinic, NYU Marketing Professor Scott Galloway makes predictions about the state of retail in 2015. Galloway says pure play retail - whether pure e-commerce or pure brick-and-mortar – is dying. Content and commerce will become more integrated and essential to converting browsers into buyers. Impulse purchases are on their way out and Apple will become luxury brand 1) The Death of Pure Play Retail Despite charismatic founders and enticing offerings for consumers, none of the e-commerce stars of the early 2000s have met expectations. Net-a-porter is still not profitable. Fab.com went from a $1 billion valuation and raising $150 million of additional funding in 2013 to a $15 million fire sale in November 2014. Gilt raised $50 million of funding in February and disappointed investors waiting for an IPO in 2014. Simply put, Amazon’s low-cost and fast delivery options have made it too expensive for any brand to compete with an online-only model. However, stores are where brands can and should compete. Smart e-tailers (Warby Parker, Birchbox, Rent the Runway, Bonobos) realized early on that their customers prefer to pick up or try on their items in-store at the own convenience rather than wait for (and often miss) delivery. The last-mile problem – or the yellow slip left at the door – is Amazon’s Achilles heel. Galloway predicts that Amazon will make a transformative acquisition to gain a retail footprint in 2015: a JC Penney, a gas station chain, the U.S. Postal Service or Radio Shack. 2) Integration of Content & Commerce The death of e-tailers does not mean brands with limited online and mobile presence are safe. Commerce has reached a tipping point where more than half of all consumer purchases are influenced by online information. And consumers who go online (on a mobile device) while at the store experience a 27% lift in conversion, dispelling the myth that showrooming hurts stores. Consumers who research a purchase online p