By Calvin Cheng, Point B
Retailers are constantly evolving to meet their customers’ ever-changing expectations. Over the past 15 years retailers invested in digital capabilities including web, mobile, and other platforms. These digital channels not only provided new touchpoints for customer interactions, but provided new data and insights into customer behavior, expectations, and purchase intent. Alongside maturing analytics capabilities, retailers built the foundation for personalized content, recommendations, and promotions.
By applying lessons learned from digital engagement and analytics to brick and mortar retail locations, retailers can provide personalized, relevant, and unified customer experiences across digital and physical channels. However, achieving these outcomes requires strategic planning, investment, and delivery for store associates, operations and technology.
Death Of The Brick And Mortar Retail Store?
Mark Twain’s quote, “The reports of my death have been greatly exaggerated,” is quite appropriate amidst headlines about the “death of retail stores.” In fact, research shows just the opposite. As of Q3 2017, the US Census Bureau reported that 91 percent of all retail transactions still occur in traditional brick and mortar stores. “Digital-first” companies like Amazon are even beginning to invest in capabilities for physical retail outlets — think: Amazon Book Stores, the Whole Foods acquisition, Kohl’s partnership, and Amazon Go. Yet with growing pressures to close stores and reduce headcount, retailers are boldly investing in their stores to remain relevant to customers, increase revenue, and improve profit margin, making now the ideal time for retailers to renew investments for the in-store experience as a differentiator to customers.
Creative Approaches To Delivering A Quality In-Store Customer Experience
As retailers return to the mindset that physical stores, associates, and inventory are differentiators and assets, rather than liabilities when competing with direct to consumer companies, many are creating engaging and personalized customer experiences — and not all are digital. Consider examples such as Levi’s, who offers services like in-store tailoring of jeans, and beauty retailers such as ULTA and Sephora who both provide beauty salon services. Retailers and brands like these continue to build relevant and valuable connections between customers and the stores they visit.
And some retailers are implementing both in-store and digital experiences. To help customers make the best decisions while shopping in stores, Kroger has invested in digital signage on shelves to display nutrition and dietary content, with plans to eventually sync with shoppers’ smartphones for personalized alerts. Digital signage also improves store operations by reducing time spent on pricing changes.
In yet other examples: vendors like AWM Smart Shelf and Perch use embedded cameras to determine spatial orientation and distance of customers, facial recognition for age, ethnicity, and emotional sentiment in order to dynamically change and personalize content on digital displays. Capabilities in proximity marketing can help retailers engage customers in new ways that are relevant, engaging, and personalized.
Leveraging Data As The New Oil
Retailers should look to data and analytical insights when deciding which areas to improve and optimize the in-store customer experience. This requires strategic execution in the areas of data capture and analysis to act and deliver on engaging experiences for both in-store and online customers. However, ensuring your organization has the proper technology in place in which to capture these insights is crucial in deciding which strategies to implement. To begin, you should:
- Capture And Aggregate Data From New And Untapped Sources
As retail locations become digitally enabled via in-store Wi-Fi, mobile apps, digital signage, RFID, beacons, sensors, and other connected devices, capturing and aggregating this new data becomes increasingly important. To do so, make sure you have a robust and flexible data architecture and governance to capture this data. Then, integrate this data with your existing information to yield the best results.
- Invest In Data Analytics Tools
As data continues to increase in variety, velocity and volume, organizations must also mature in their use of advanced analytics and machine learning to identify trends and insights. By investing in data science resources and tools for advanced analytics, retail organizations can gain new insights into their customers and operations. Leveraging these insights, retailers can choose which channels to implement in delivering a unified experience for customers in stores.
- Test, Learn, And Launch
Having hypotheses to improve the customer experience is not enough. Retailers need to test and learn against those hypotheses to refine options that meet customer expectations. Applying a design thinking approach to iteratively test and learn with customers will allow brands to rapidly evolve concepts alongside changing customer expectations.
Retailers have gained tremendous insights into customer behavior and expectations from their investments in digital platforms, analytics, and experiences. By applying a similar approach to investments in physical stores, retailers can use data and analytics to unlock new insights to test, learn and launch new ways to engage customers while improving in-store revenue, customer experience, and operations.
About The Author
Calvin Cheng is a principal with Point B, an integrated management consulting, venture investment, and real estate development firm. He has helped clients in strategy and delivery to improve sales and profitability through customer experience, digital marketing and sales, and omni-channel capabilities.