Digital is pushing the frontiers of marketing and customer engagement, especially in retail. From being product-centric in early days, retail has quickly evolved into a full-fledged customer-centric experience. Today, digital technologies and the abundant possibilities of ceaselessly connecting with the customer has paved the way for retail to be a more nuanced, personalized experience.
True, retail faces its challenges when it comes to digitalization, given its strong association with being a ‘touch and feel’ experience; something antagonistic to digital. The industry is also undergoing transition, primarily in reaction to the relentless rise of e-commerce. While offline stores still account for 90% of retail business, their online counterparts are quickly gaining popularity through innovative marketing and focusing on the convenience factor. To keep up, brands are transforming their brick and mortar stores by adopting digital technologies that will retain the attention of today’s distracted customer through optimized, brand-centric in-store experiences.
Deploying digital technologies such as IoT, AR/VR, Big Data and Machine Learning in an in-store environment offers infinite, compelling opportunities to retailers.
Factors Driving the Digital Transformation
On the face of it, digitalization for a brick and mortar retailer translates to new ways to engage and excite the customer to create incredible experiences and ́ ‘stories’. But there’s more to this narrative than building smarter store environments. Below are some factors that spur the adoption of digital technology across conventional retail stores.
In-store technology — whether in the form of virtual product lanes and trials, interactive kiosks or smart displays — helps to blur the distinction between online and offline shopping experiences for the buyer.
It helps the brand to take the centre stage in the customer psyche and the buying channel becomes inconsequential.
A novel, immersive experience at a store helps build brand recall and customer loyalty. Smart use of virtual/augmented reality can enhance store ambience, entertain visitors and build a memorable shopping experience through personalized interactions.
Moreover, there are obvious cost savings that technology brings in; especially in terms of efficient staff and inventory management. A greater advantage to the retailer is the effortless mapping and analytics of data related to customer behaviour that AI-powered footfall counter and similar technologies help gather. Needless to say, such data can be valuable in planning future brand marketing.
Lately, the growth of omnichannel commerce solutions has further fused the online and offline retail businesses for brands. Omnichannel buying enables offline smart stores to act as extensions of the brand’s online presence. For example, many brands such as Starbucks, Van Heusen, Zivame, Pepperfry, Adidas offer buyers the option to buy online and pick up the orders at physical stores. This becomes a true win-win for the buyer and the seller, owing to the flexibility and convenience that incorporated.
The Digitization Impact on Offline Store Experience
Given the plethora of technologies available, physical stores selectively deploy technology based on the specific business goals in target. Once the goals are defined, enabling technologies can be chosen and implemented.
One obvious goal for a retail brand is to enhance the overall shopping experience, for every customer who walks in. Another is to boost store footfalls.
Let us look at some in-store technology use cases below:
Headsets and devices to help users superimpose digital environments in real-life environments. Many brands deploy devices built on augmented reality to enable customers to experience the product. Car makers such as BMW and Range Rover use AR devices to allow users to experience the vehicles without physical driving.
A number of retailers have taken to using VR to show virtual products to the customer. This is convenient when you don’t have the product available in-store. For example, in its store in Amsterdam, Marks & Spencer has a virtual, real-life size dress rail on a touchscreen, allowing shoppers to browse through the latest offerings. Another instance is IKEA building a VR store experience through pop up stores in the Middle East, where visitors can view, and shop IKEA’s furnishing products by wearing VR headsets.
AI has multiple applications in a physical store. The most familiar instance is that of Amazon Go, which deploys AI to track purchases and enable a seamless buying experience, in a cashierless store. The landscape of AI applications in physical retail is still unravelling itself. Some instances include the deployment of voice AI to get customer service and enable customized store settings, interactive dressing rooms and self-checkouts based on AI systems. The future possibilities are endless.
China is considered a leader in the adoption of facial recognition to enhance in-store retail experience. Customers pay by scanning their faces, which in the database are linked to payment details; shopping is seamless and the entire process beats identity frauds. Another benefit is that shoplifters can be identified by the system as soon as they enter the store.
In-store sensor technology
Allows for use of in-store analytics capabilities to drive better customer experience. While sensor technology pertains largely to on-the-go-billing and merchandise tracking — for eg., RFID, and sensor-fitted shelves to spot misplaced stock– the benefits reflect in boosted sales, merchandise management and enhanced store layout, among others.
When a customer visits a store, it gives the brand an opportunity to create a delightful and memorable experience. Digitization can play a major part in creating these lasting relationships with your customers by :
- Offering multiple options such as interactive kiosks and AI-powered bots to reduce the stress on the sales personnel. This self-service environment makes for happy shopping experience for the visitor. Use of AI-powered bots at the store can assist sales by gathering customer data without staff intervention. Similarly, AI-powered kiosks support self-service to a great extent by auto-matching customer preferences to product recommendations.
- Bridging the online-offline divide in retail business through omnichannel commerce – for instance, allow shoppers to pay online and nudges them to visit the store for order fulfilment. Or allow in-store customers to place orders online and deliver it to their doorstep.
Once businesses have mapped business goals to technology and implemented it, it is vital to measure impact and gauge the ROI prior to scaling. In fact, planning your investments on digital technologies must accompany pre-defined measuring mechanisms to check if the technology meets pre-set branding or business goals. In simple terms, the digitization efforts must favour the customer as well as the business. To stay on track, your business must build a consistent performance assessment system.