With every retail sales ﬁgure that comes out, one trend becomes apparent internet sales are growing while brick and mortar stores are declining. This inverse relationship will likely continue. So, what are retail chains with heavy investment and brand equity in brick and mortar stores to do? The old adage, “if you can’t beat them, join them,” applies here. No, I’m not suggesting that multi-channel retail chains shutter the doors and put all their eggs into enhancing their e-commerce websites. But, what I am saying is that these retail chains should put resources into digitalizing the in-store experience for consumers, as well as for the backend analytics that can help tailor offers and promotions to that same consumer.
In essence, by digitalizing the in-store experience, brick and mortar retail chains are giving consumers the same type of experience they are accustomed to online. This includes:
Why is this so important? Nearly 90 percent of sales happen in brick and mortar locations, and more and more customers expect the same kind of experience they are getting on the web. Thus, it has become essential, in my view, for stores to digitalize, based simply on the customer demand for such “web-like” amenities and conveniences as self-serve interactive kiosk, mobile apps that make it easy to ﬁnd a particular product, and location-based, customized promotion alerts (triggered by store-installed beacons that can identify a mobile device and its owner’s buying preferences). The opportunities to marry mobile devices with the in-store experience should not be underestimated 84 percent of smartphone shoppers use their devices to shop instore.
We ﬁrst saw this attention to digitalization at retail locations at more technology-based chains, such as consumer electronics stores, about ﬁve or six years ago. In fact, Quinnox helped one major electronics retailer digitalize their entire product catalog, allowing this household brand to present products in a variety of ways – kiosks, mobile apps, and more. This clearly has helped their customers make quick decisions, resulting in increased sales instore that may have otherwise happened on the web.
What does more “web-like” mean exactly? It means more social inputs, such as a store representative showing the customer feedback and reviews of the product on a tablet. It means enabling the consumer to compare and check pricing with the competition so that they can make a decision right there, or take advantage of any price matching opportunities. It could also mean avoiding long checkout lines by paying for merchandise on a mobile device, through store pick-ups, or with direct shipping Captivating trends sure to delight consumers include virtual reality shopping, with the potential for “smart mirrors” that show an electronic image of clothing on the customer (perhaps one day replacing ﬁtting rooms).
From the retailer’s perspective, digitalization can help meet a growing necessity to leverage analytics. Besides being able to target customers with customized promotions based on their shopping preferences, they also make gains in inventory management and visibility of stocks in other stores.
There are some signiﬁcant challenges. For example, substantial IT investments may need to be made. From upgrading Wi-Fi in all stores to installing beacons to digitalizing a product catalog, tough decisions may need to be made with limited dollars. The good news is that it doesn’t all have to happen at once but in phases. (Over 80 percent of retailers expect to maintain or increase store technology investments over the next three years.) Other challenges include consumer privacy issues. Retailers have to ensure permissions, compliance, and security requirements are met.
The key takeaway, regardless of the scope of retailer digitalization, is that it must be done using an integrated, single platform approach. In fact, over 40 percent of retailer even now agree that a single platform will simplify in-store technology within the next three years.
A single platform must cover three essentials: enhancement of the customer experience, standardized business processes across channels, and increased store associate productivity. For today’s brick and mortar retailers, they’re very survival could depend on it.