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Invest to be customer obsessed

We share insights from Forrester’s ‘Digital Store Playbook’ on how to transform retail operations to enhance the digital customer experience

Today’s customers look for and buy “experiences”, not simply “products”. If you think of your company as being more about product sales, rather than experiences, that can be daunting. The good news is, digital technology gives you a toolkit to engage your customers in new ways and, at the same time, improve your store operations.  

Digitally enabled tools for in-store sales staff and consumer self-service provide personalised assistance to customers in the context of their shopping journeys. Digital technologies can also augment store operations to help automate areas such as staffing, task management, omni-channel fulfilment and loss prevention, all of which can significantly boost efficiency and flexibility. 

How does your customer think about shopping? By 2022, Forrester forecasts that over half of all retail sales in Europe will involve digital touchpoints, mostly from smartphones and tablets.  

Customers want to engage with one unified brand or organisation, regardless of the various touchpoints they use to research and ultimately buy. This means digital presence is integral to how the customer discovers, researches and buys from a retailer. Digital assets such as images, ratings/reviews and product dimensions/fitting information heavily influence sales, both online and in-store.  

Keep pace with changing customer expectations

Ultimately, the retail businesses that survive cut-throat competition, often thin margins and finicky shoppers are those that adapt to ever-evolving consumer behaviours and expectations – both online and in bricks and mortar stores.  

So how do customers today differ from customers in years past? First, consumers are always connected. Some 64% of European online adults expect companies to make their websites mobile-friendly, and 51% feel frustrated and annoyed when they find it is not. The good news is that 61% are more likely to return to a website if it is mobile friendly.

Self-service tools such as Argos’s mobile app add value for channel-agnostic customers by allowing them to check stock and purchase from inventory held at a physical store location.

Second, digital technology has fundamentally altered consumer expectations. According to a digital business executive at one fashion retailer: “The consumer has been ahead of the retailer since day one. The retailer is, in a sense, chasing the consumer.”  

What’s going on? Consumers view their mobile devices as trusted advisors while shopping in-store, and expect to get the information or services they want in-aisle, whether validating the prices and information they find in-store or buying from a competitor’s website. And when they’re in a store, consumers expect the same product assortment, rapid delivery and product information as they get online.

Many European retailers, including Marks & Spencer, Topshop and Zara, allow customers to check in-store stock availability online. However, few have followed the likes of Argos, Fnac or Saturn by also letting customers buy this store stock online.  

Create value through in-store tech

As digital business executives have noted, the more efficient an in-store sales assistant is, the more time he or she can spend engaging with the customer.

When evaluating the potential of in-store digital technology, organisations should think about how any investment will meet customer expectations, create operational efficiencies and deliver real-time actions and insights.

Meet customer expectations: Fully 45% of digital executives at retail organisations are expanding, upgrading, or making new investments in engagement devices to help staff on the shopfloor deliver more personalised and contextual experiences to customers in stores.

Sales assistants today need to provide more service and value than the customer can get either through their own smartphone or via an interactive touchscreen in-store – think ordering out-of-stock items or checking inventory without leaving the customer’s side.  

One example is UK home improvement retailer B&Q, which uses virtual reality headsets to help customers with kitchen design. Another is department store John Lewis, whose Interactive Sofa Studio is a touchscreen service where customers can mock up and visualise different styles and colour combinations.

Digitally connected fitting rooms are reinventing how technology and digital signage can help build baskets and improve conversions. For example, a customer can check prices, browse the product catalogue, and, in certain stores, virtually “try on” outfits via an augmented reality-enabled mirror – without leaving the dressing room.

Before committing to new store technologies on a broad scale, retailers need to pilot, test, analyse and learn quickly to understand what does and doesn’t work for their customers, in-store sales staff and the business as a whole. Create operational efficiencies: Digital technology can optimise general store operations, including stock and task management and loss prevention. In-store solutions let retailers analyse merchandise and real-estate performance in a way that’s comparable to the analysis they get for their digital touchpoints.

Real-time digital store analytics promises to meaningfully improve operations and growth, including general store operations, labour optimisation, store efficiency, associate effectiveness and inventory management. For instance, after implementing a radio-frequency identification (RFID) tracking system that tags millions of items, Lululemon achieved zero stock-outs and full inventory visibility with accuracy to 98%. 

Deliver real-time actions and insights: Retailers will be able to provide relevant and contextual experiences to customers and associates in their moments of need by tapping into real-time analytics and customer data, and combining these insights with location, time of day, weather and advanced sensor data, such as physical activity.

Read more about developments in retail technology

Fashion retailer Boden is going through a transformation process, using digital elements across the business and fostering innovation.

Augmented reality has been positioned as a way to extend digital experiences onto the retail shop floor – but it has far more uses behind the scenes.

To transform a store, transform the business

To truly transform a retail store, retailers will need to transform the whole organisation to a customer-led ethos that spans all digital and physical operations. It’s a tall order, so where to start? First, developing a digital store requires more than simply introducing robots, virtual reality or any Star Trek-like technology. To get real value, retailers must break down barriers from traditionally siloed organisational structures, outdated technology and outmoded incentives, to connect digital store technology to enterprise-wide systems, data and processes. Second, these connected technologies power digital store transformation, creating value and efficiency for retailers, not just a better customer experience.

Digital store platforms can produce actionable intelligence for retailers in areas such as staffing, inventory visibility and loss prevention. Third, digital technology in-store isn’t one-size-fits-all. Retailers must continue to test, pilot and roll out digital capabilities incrementally while measuring the impact on customer satisfaction and store processes. 
 
Michelle Beeson is an analyst at Forrester.

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