High street stores embrace digital to entice customers

Feature

High street stores embrace digital to entice customers

Boarded up windows, closing down sales and an increase in charity shops.

Britain’s once vibrant high street is riding a wave of austerity, with many retailers falling into troubled waters – Savills estate agents estimates that there are now 30,000 empty shops across Britain.

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Figures from the British Retail Consortium show that in the first six months of 2013, in-store footfall fell by 1.5% on average compared with a 2.9% decline during the same period in 2012.

But e-commerce is continuing to grow each year. In July the Interactive Media in Retail Group (IMRG) said sales grew 9% year on year. Following a 20% year-on-year growth in June, this happened to be the slowest growth since January 2010, as the heat wave drove people outside. But sales on mobile devices continued to show strong growth with a 129% year-on-year increase in July.

Customers are still staying off the high street, using online outlets to research and buy their items at the cheapest possible price, but the high street is starting to see a bit of a renaissance by bridging bricks and mortar with mouse clicks.

Showrooming

By 2020, Deloitte predicts that physical stores will exist only as a “showroom” for a retailer’s products, to help with the research phase of the purchase journey.

“That’s really what our stores are – showrooms. We have much fewer stores than we used to have,” says Richard Glanville, chief financial officer at Aurora Fashions, which oversaw the implementation of iPads at Oasis, Warehouse and Coast.

“We’ve managed to get rid of quite a few of our stores,” he adds. “That’s obviously causing social problems in towns and cities where retailers are deserting, but omni-channel is the way to move forward.” Now Coast, Warehouse and Oasis have an average of 60 stores per chain.  “We still think that’s probably too many,” he says. “We’re probably moving to a situation where you just want flagships, perhaps 50, and a really good omni-channel offering.”

An omni-channel offering

John Lewis also calls itself an omni-channel retailer, defining omni-channel as the seamless experience customers feel when they change between shopping online and in-store.

“It is about creating a new way people will shop. It’s not just about being in a building or online, but joining these things up,” says John Lewis IT director Paul Coby.

The store also encourages customers into the store by improving their experience using an array of technology, which in turn reduces costs and improves efficiency for the company.

One of its omni-channel offerings was launching a store in Exeter last year that was half the size of a conventional store but integrated with IT. Customers were encouraged to visit a JohnLewis.com terminal to choose a product and then collect it in store.

The retailer has also experimented with large interactive screens displaying product information, as well as implementing augmented reality in window displays. It is also looking into radio-frequency identification (RFID) and technology from startups to support its popular click-and-collect service.

Baby equipment specialist Kiddicare has implemented digital labels in its stores using ZBD Solutions, which replaces costly and labour-intensive paper signage.

The digital labels can be instantly updated wirelessly, helping stores improve their competitive edge which may be lost if prices are not changed quick enough.

“Retailers realise they’re being showroomed every day. Right in the store, they’re Googling products and finding them cheaper elsewhere,” says Andrew Dark, CEO of ZBD Solutions.

Kiddicare uses the technology to check online prices of its competitors and immediately change product pricing accordingly.

Scott Weavers-Wright, chief executive of Kiddicare, says: “With ZBD’s fully graphic displays, we can add QR [quick response] codes to the shelf in the future to provide additional information to customers’ mobile phones or store assistants’ tablets. This information could include product demonstrations, customer reviews or anything else that will enhance the shopping experience. It’s all available via our free in-store Wi-Fi network.”

In-store kiosks

In-store kiosks have a range of functions and allow customers to browse and order products, find special offers, and arrange pickup at a collection bay.

But they are not new; Kodak has been producing its Picture Kiosks for 10 years. The kiosks allow customers to print photos from memory cards and devices, and the first was introduced to the UK in 2004. Boots was also hot on the kiosks trend. Its kiosks allow advantage card holders to obtain special offers in store.

In 2012, Marks & Spencer introduced a range of touchscreen kiosks to stores in Manchester and London to extend its multi-channel strategy. Most recently, the flagship store on Oxford Street implemented five Browse & Order Points that connect the customer to the company’s full range online, where the customer can pay for an item and have it ordered into the store or for home delivery. The flash technology was created by Usablenet, which designed the kiosks to provide QR codes so customers can save product details on their phones.

The store will also introduce “Style Online” kiosks that immerse the customer with videos, reviews and the ability to build outfits, or learn what duvet they should buy from the position in which they sleep. These kiosks will also be linked up to the Browse & Order Points to enable purchase.

Supplier Avanade has produced a similar Grab & Go kiosk for customers to browse, search and select products and add them to virtual baskets which can be exported and shared with personal devices – using hand-gesture technology to swipe the item from the screen directly onto a smartphone or tablet.

Tech innovation failures

But not all technology innovations in the retail sector hit the spot. Last year, John Lewis trialled two virtual StyleMe mirrors, developed by Cisco, with bespoke built-in 3D cameras to capture shoppers’ dimensions and superimpose a virtual outfit over their reflections.

Julian Burnett, head of IT architecture at the retailer, says the project failed to make any money. “The magic mirrors allowed us the opportunity to trial. We tested the hypothesis, it failed, and we got out quickly,” says Burnett. “Failing fast at innovation is really important. You can waste a lot of time and energy if you don’t.

“It didn’t create a compelling and sustainable [proposition] for us. But it created theatre in stores, which is something all retailers want,” he adds.

The return of the high street

Retailers are pushing the use of IT and innovative store technology to attract customers back into their stores. In September, Tesco took the unprecedented step to develop and launch its own tablet the Hudl which it hopes will build customer loyalty.

The empty shops on streets across the UK show we are a long way from fixing the British economy, but it does provide an opportunity for some. A few companies which started in the virtual space are moving into physical stores thanks to initiatives such as PopUp Britain.

While some traditional retailers have been innovating with technology to try to encourage customers back into the shops, some online traders are seeing the potential of having physical stores.

Amazon’s collection lockers allow people to collect orders without waiting for home delivery. Customers are sent a personal code that enables them to open lockers located in large shopping centres, convenience stores, news agents and train stations.

Auction site eBay recently worked with Argos on a similar initiative. A total of 50 eBay merchants are involved in the pilot of a system to fulfil click‑and-collect orders through 150 UK Argos outlets.

Online luxury fashion retailer Net-a-Porter launched several one-off pop-up graphic stores called The Window Shop, which allow customers to shop using augmented reality from the windows of the store.

An organisation called PopUp Britain has capitalised on the empty high street shops, by matching them with online retail startups for a short period of intense selling in-store. The scheme is backed by private sector funding and has opened stores in Poulton-Le-Fylde, near Blackpool, Camberley in Surrey, Moreton-in-Marsh in Gloucestershire as well as several around London, including most recently Piccadilly.

What all this shows is that while retailers have been battling under tough economic conditions, there are plenty of ways to use technology innovatively on the high street.


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This was first published in October 2013

 

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