In-store retail experience evolves with the demands of tech-savvy shoppers
The increasing demands of today's "always-connected" shoppers are redefining the in-store buying experience
The fact that many consumers now prefer to shop online means their expectations of the in-store experience are higher than ever and should match, if not exceed, the technological advancements they enjoy online.
Nearly a quarter (21%) of all sales in the UK are now online, and this figure is on an upward trajectory as the digital revolution makes its mark in retail.
Using technology in the shops to meet the ever-increasing demands of tech-savvy shoppers is a major challenge, but many leading retailers are investing to ensure the in-store experience complements customers' online experience.
Retailers that have got it right replicate the brand experience at every touchpoint, says Rob Bamforth, principal analyst, business communications, at Quocirca. Apple is a prime example.
"The Apple experience is infused across the stores, the websites and with resellers. It is almost a cultural thing. In the shops, the people who take the money do not hide behind the tills. They are interacting with customers and demonstrating the Apple products. Retailers need to stamp their identity at every touchpoint and increase their connection with the customer," he says.
However, it is a difficult landscape to negotiate, especially as resources often seem better directed at the digital channels for their clear economic return.
"Not many retailers know what to do. It depends on what sector the retailer is in, and different sectors are at different stages of having to deal with the internet cannibalising their physical stores," says Matthew Rubin, retail analyst at Verdict.
With electricals, for example, a huge amount of money goes via the online channel, as customers go into stores to check out devices and then buy the cheapest available online. This type of scenario has encouraged retailers to make physical stores more like showrooms, with assistants who have an extensive knowledge of products, and to apply all local online sales to a store that helped enable a sale, thereby recognising the contribution of the physical store.
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"The interaction of the store with online and mobile needs to be fluid and smooth – where it is recognised how one adds value to the other – otherwise the risk is that one tries to kill the other off," says Rubin.
Verdict research shows that in 2013, 61% of online shoppers researched online before making a purchase in a store, so the traffic is not all one way. The interaction between the different channels is sizeable and will only grow.
"The online channel is growing to become the more likely choice of transaction, but the stores are unlikely to die. They are evolving to support brands and to highlight the value of products," says Rubin.
For the high street to be successful, technologies that help the customer with information, and which smooth the transaction process, play a key role, says Dan West, a director at KPMG's CIO/IT advisory unit.
"Retailers are using tablets in-store to display or capture product and customer information, digitally offering the full catalogue of products or promotions not necessarily available in stock within the physical store, or as an aid to the sales adviser," he says.
West says savvy retailers are also offering in-store Wi-Fi to allow consumers to connect and share information, and harnessing footfall technology to capture consumers' shopping behaviour.
Retailers are using the information they have about the consumer to enrich the personal experience and make it more tailored and relevant
Dan West, KPMG
"This analysis and insight can then be used to improve visual merchandising and store dynamics. We are also seeing the use of dynamic geo-location promotions and content based on customer profiles on their mobile device when in the vicinity of the store or aisles," he says.
Retail trends in the physical stores are directed towards improving the capture and display of information, and used to harness the power of mobile.
According to Verdict, in 2013, spend via mobile phones accounted for 6.5% of total online expenditure, while tablets accounted for 16.9%. People are seldom without their mobile devices and 15% of online shoppers have used their mobile phone for researching their purchase while out shopping.
West says shoppers expect to have a good in-store experience with state-of-the-art technology to complement the other channels they shop through.
"The leading retailers that understand this are providing a visually engaging digital experience with lots of dynamic content, either on the walls or on mobile devices. Retailers are using the information they have about the consumer to enrich the personal experience and make it more tailored and relevant," says West.
They are endeavouring to offer flexible services to fulfil the customer order more quickly and efficiently, having real-time data of stock, delivery options and insight of the consumer's existing orders within the store on a mobile device.
The focus on mobility, flexibility and fulfilling customer expectations quickly and efficiently is also impacting point-of-sale (POS) systems, as customers do not want to be stuck or held up at any point in the transaction process, especially when it comes to making a payment.
"POS systems are still very important, but future trends indicate that as cash payments decline, mobile pay stations or enabling sales advisers to take payment wherever throughout the store will become more prevalent than fixed e-POS," says West.
Rubin says retailers should aim to give customers a good experience through all their various transaction points, and many are updating their stores to ensure they are on a par with the online experience.
He points to the new Argos digital stores with tablets and iPads instead of catalogues, and a fast-track service, where consumers have the option to pay and receive at the same time.
Retailers should aim to give customers a good experience through all their various transaction points
Access to free Wi-Fi is offered and there are digital displays to inspire orders as well as assistants on hand with the latest technology to aid shoppers in their searches as part of the retailer's plan to become a digital retail leader.
"Argos is trying to make the transaction process as quick as possible, and it's these stores that are trying to give the customer a good experience, so as soon as a customer makes an order, the staff can instantly start picking it before it is paid for. There is a lot less mandatory time spent queuing, so there is a lot less seating. Customers have a digital interface through iPads, and Argos is heading towards enabling transactions through them," says Rubin.
Click and collect is popular with today's customers, who like the idea of having somewhere convenient to collect products rather than having to wait at home for a delivery, and this is why Argos's revamp of its physical stores makes economic sense.
Verdict research reveals that 51% of online shoppers have used a click-and-collect service, and this figure is growing steadily.
Rubin says the popularity of click and collect gives retailers more reason to keep stores.
"It is necessary for retailers to have stores as pick-up points, and it is a lot cheaper for them than doing home deliveries. Food and grocery retailers, especially, are still struggling with home deliveries because shoppers don't like paying a delivery charge," he says.
The future of the physical store depends on how well retailers can use technologies to improve the personal shopping experience, tailored to meet individual needs and to help deliver excellent customer service.
Rubin says there are opportunities with near-field communication (NFC) technologies that open up possibilities for use in mobile phones for payment in conjunction with an electronic wallet, and to recognise customers.
Retailers need to invest in their stores and move away from clunky technology that is bad for their reputation as it holds people in queues and gives them a poor experience
"Retailers that have the ability to offer personalised services using technologies to recognise customers are more likely to succeed. Live interactions are the next step through applications such as alerts on mobile phones about products that will interest an individual, or voucher [offers]," says Rubin.
The lack of convergence is also a problem for POS systems, says Rubin, with varying technologies that push their own software.
"If the issue is Google Wallet versus Visa Wallet, then you need enough mass or enough people with the technologies for retailers to be willing to invest. There are other companies that want to control the banking process, such as PayPal and phone carriers developing wallets to make in-store transactions quicker. However, currently with NFC and payment wallets, there is not enough convergence for retailers to look much further beyond chip and PIN because there is no one overriding technology," he says.
Crucially, Rubin says, retailers need to invest in their stores and move away from "clunky technology" that is bad for their reputation as it holds people in queues and gives them a poor experience and a poor perception of customer service.
"Stores are part of the omni-channel experience and require investment if they are to survive. However, throughout every transaction point, data is king of the omni-channel and the privacy of customer data must be respected," says Rubin.
"If stores can use data to find out what an individual shopper likes and dislikes, how long they spend browsing a site before making a transaction, or how many dropped baskets there were, they can use that knowledge to make improvements and give customers a better buying experience on their journey through online interaction to shopping in-store," he says.