COMPASS MAGAZINE #11
COMPASS MAGAZINE #11

CONSUMER GOODS & RETAIL BRICKS & MORTAR : Creating stores that consumers want to visit

As the e-commerce experience continues to improve, it is tougher than ever to attract shoppers to physical stores – and those who do visit the store often buy online. To make their physical sites work, retailers are struggling to redefine their stores as appealing destinations not only for test-driving a product, but also for buying it.

Mobile technology holds challenges and opportunities for retailers. Professional services company Deloitte found that 75% of consumers research products both online and in-store before purchasing, while the annual ”Mobile Life” study conducted by TNS, a London-based global market research company, suggested that one third of consumers practice ‘showrooming’ – browsing in stores before purchasing from a competitor online.

Showrooming can be fatal to traditional bricks-and-mortar stores. The trick to combat it is for such stores to make their engagement with shoppers so rich that the customer will want to purchase their product there and then.

“Providing the ‘In-Store Experience’ is vital for physical stores to win over foot traffic and brand loyalty,” Shelley E. Kohan, vice president of retail consulting at in-store analytics company RetailNext (California, USA), wrote in a recent column for Chain Store Age. “Shoppers want to explore, learn and have fun. Above all else, they want that instant gratification from products that are in stock and easy to find.”

Retailers are taking Kohan’s message to heart. For example, UK fashion retailer Burberry provides an immersive brand experience at its London flagship store, where a gallery featuring the brand’s history sits alongside digital screens, speakers, a hydraulic stage and iPads. “It’s not just about shopping,” Christopher Bailey, Burberry’s chief creative officer told The Business of Fashion website. “The important thing is that when you go in, you feel entertained.”

INTELLIGENT SPACE

The analytics capabilities inherent in online retail are now becoming a reality for the physical store as well. QR codes, RFID tags, shopping apps and video clips delivered in-store can provide vital information about how consumers interact with the store so retailers can make intelligent use of the space they have.

The growth in bricks-and-mortar stores’ use of such technologies is consistent with analyst firm IDC Retail Insights’ Top 10 predictions for 2013, which forecast that retailers will “pivot their merchandising and marketing on customer analytics” by investing in “customer analytics, merchandising and marketing technologies” as well as “technologies that enable visibility, visualization and virtualization.” Using these sophisticated platforms, retailers can pull together information such as in-store analytics, consumer group feedback and brand rules, and share it directly with planning teams to enable informed decisions about store layouts and product assortments.

“The goal is to have in-store shopping metrics that mirror online capabilities: the who-what-when-where-how of customers,” Kohan said. “It is not enough to have the data; retailers must use the data in ways to grow shareholder value. Applying big-data metrics in the physical store results in targeted, personalized marketing and predictive in-store shopping behavior.”

DELIVERING THE EXPERIENCE

The store itself isn’t everything; customer service is a vital part of the in-store shopping experience that online retailers simply can’t match. IDC Retail Insights found that as many as 60% of consumers were more likely to buy in-store when assisted by trustworthy, knowledgeable store associates – but they want mobile content too. Some 64% said that what they can learn using their smartphone in-store would influence their decisions as much as what they learned during in-depth online research at home.

“Rather than seeing mobile as a threat to in-store sales, retailers must embrace it as the most immediate and personalized way to engage shoppers to ensure they don’t leave empty-handed,” said Matthew Froggatt, chief development officer at TNS.

That personalized service can begin even before a shopper enters the store, subject to their privacy preferences. “Some stores are backing up geo-location technology with analytics and apps so that when a customer is nearby they receive a message that’s relevant to them,” said Greg Girard, program director of Merchandise Strategies at IDC Retail Insights. “If a customer abandoned a dress in her online shopping cart and is now outside the store, she’s more likely to have questions about the dress than concerns about the price. So you can pop up a message to say someone will be there to greet her and answer those questions. In the process, you shift away from discounting and provide the service she really wants.”

In the store, QR codes and RFID tags can provide relevant, interactive information about products through shoppers’ smartphones or through the store’s mirrors and digital signage. Fashion retailers Burberry, Guess and Benetton are going a step further, providing tablet devices to give shop- floor staff an overview of inventory and customer preferences so they can provide a more intuitive, personalized service.

Shopping apps also are proving popular. For example, US-based discounter Walmart offers an app that helps consumers plan their visit and connect to their online and physical store experiences. “We can greet each of our customers by name, guide them through our stores, and give them product recommendations and real-time savings — all from their mobile devices,” said Gibu Thomas, Walmart’s senior vice president of mobile and digital.

CUSTOMER CONVENIENCE

This type of connectivity – supported by network-wide visibility of inventory and fast delivery options for out-of-stock items – is helping some retailers turn showrooming to their advantage.

“It’s not just about shopping. The important thing is that when you go in, you feel entertained.”

Christopher Bailey Chief Creative Officer, Burberry

For example, UK electronics retailer Dixons has retrained its staff and removed the personal sales targets that pitted its stores against the company’s own online offer. It now provides store-wide incentive programs linked to customer satisfaction, whether the sale is transacted online or in-store. “We’ve dramatically improved our online search and we’ll be crediting stores with online sales in their catchment area,” Dixons CEO Sebastian James told Retail Week. “It’s good practice, but surprisingly few retailers are doing it.”

“The key is to find ways to make buying in-store the convenient option,” TNS’s Froggatt sums up. “Anything that saves the consumer time, money or angst will help reduce the flow of people out of the shop to purchase elsewhere.”

While e-commerce brings challenges to traditional retailers, it also presents an opportunity to harness information and integrate customers’ technology preferences with the physical space of the store. Retailers who take that opportunity are delivering the anytime, anywhere, any way stores that today’s consumers want.

by Jacqui Griffiths Back to top