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Posted by on Jul 14, 2017 in Retail |

Physical to Digital – The New Era in Retail

Physical to Digital – The New Era in Retail

For customers today, shopping is all about speed, convenience, and flexibility and in retail, the journey begins with the customer. The Gen-Z shopper is both informed and impromptu. They want to shop anywhere, anytime and expect a seamless experience whether they are shopping in-store or online. However, the revolution in retail is driven not only by ever changing consumer preferences but also by rapid advances in technology. Though e-commerce accounts for only 8.5 percent of the total retail revenue [1], the growth has been rapid in this space. Market reports suggest that while the market share of retailers is fairly huge, the stores with differentiated value offerings are witnessing better growth.

Digital retail requires a deep understanding of how customers use technology in their everyday life and then deploying technology to embed the retail brand in their minds. This real time model calls for real time access to sensors and devices such as Apple’s iBeacon and the Internet of Things to create a competitive advantage. To begin with, mobile alerts are used as a medium to deliver the right message, at the right time, to the right shoppers. From new product announcements to personalized offers, it is an ideal way to capture buyers’ attention and spend. A simple scan on that product tag of your favourite item in the store will give you access to all the related information. From price to size, you have all the information at your fingertips.

For retailers to succeed in this environment they need to use technology to enhance the in-store experience and bring the physical and digital world into one experience. Augmented Reality, one of the most trusted technologies to redefine retail, not only adds visual aesthetics to customers’ in-store experiences but also enhances their online purchase process. A onetime 3D scan in the virtual dressing room allows shoppers to virtually try an outfit in store or at home, removing any barriers of purchase of the product online. GAP’s “Dressing Room” app built in collaboration with Google was launched early this year to creatively engage with customers and fight the company’s declining sales. [2] Furthermore, data of what customers try versus what they buy can create customer insights that drive product recommendations.

Reports suggest that shoppers are more likely to buy something they touch or pick up in a store. Interactive fixtures and displays instantly attract shoppers as they use projectors and sensors to serve up rich media content when products are picked up. Shoppers gain access to product information, reviews, and other content right at the point of purchase. This way, retailers can better understand consumer behaviour. The ‘buy online and pick up at store’ concept introduces the after-hours pick up advantage. Shoppers receive a code after buying a product online. This code can then be used at the store for picking up the product. Buyers can pick up their merchandise either from a locker outside the store or from a third party location, as per their convenience.

The retail leaders constantly rethink and redefine retail with the help of technology and creativity. Apple’s ‘Today At Apple’ initiative, launched in May this year, aims at making each Apple Store “a community hub bound by shared technology and one that lubricates personal connections.” [3] Amazon recently captured global attention with the acquisition of Whole Foods Market. [4] The e-commerce giant has managed to keep its new partnership with Nike largely under the radar. Walmart Marketplace has most recently integrated with Cin7, a cloud-based inventory management solution to enable sellers to simplify order processing and inventory synchronization between the two platforms. [5] The Cin7 customers can now easily manage stock and sales as they expand their omnichannel business in the US.

With these integrations, acquisitions and collaborations increasing at an exponential rate, it wouldn’t be wrong to say that the future of retail lies in the convergence of online and offline channels.

At the end of the day, shopping is about decision making and brands must focus on what it takes for customers to say ‘yes’. Crafting personalized memorable online and offline experiences is the key to customer loyalty. After all, it is the customers’ experience that will keep them talking and coming back.

 

References:

[1] https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf

[2] https://www.engadget.com/2017/01/30/gap-augmented-reality-dressing-rooms/

[3]https://www.forbes.com/sites/pamdanziger/2017/05/20/today-at-apple-how-angela-ahrendts-imagined-a-new-apple-retail-experience/#60e5e8ac16eb

[4]https://www.edsurge.com/news/2017-06-22-how-amazon-s-purchase-of-whole-foods-highlights-the-hybrid-omnichannel-future-of-higher-ed

[5] https://barcode.com/201706238383/cin7-releases-one-click-integration-with-walmart-marketplace.html

Author: Madhuvanthi Ananth, Head – Consumer Business Unit