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Expert Opinion – March 2013

Expert Opinion

Expert Opinion

“What’s driving the renaissance of the store within cross-channel and what do retailers need to do to make the most of the opportunities this is producing?”

Stores are not going away. In fact, they are more important than ever. What is shifting is the definition of what the store really is. Today’s stores need to be about connection and experience.

Retailers need to embrace the experiential retail model. To do this, there has to be a sense of place, a world where customers can lose themselves in the brand. We want people to come into the store and explore, learn,embrace the brand story, and to be taken on a journey. We need to help customers figure out what they like and what’s important to them. Disney Stores recently changed from being product focused to embracing the store as an experience. No longer is the Disney Store about buying a stuffed toy. It’s about allowing your daughter to become a fairy princess right there in the mall. It’s about the magic of Disney! Lululemon holds yoga classes, talks and events in its stores and has created an active community. These spaces clearly express what the company believes in and have inspired devotion from customers. Great stores are a place to make personal connections with the brand. The store is not just a place where we get things we need. It is a place where we figure out who we are.

Retailers must recognise that connecting to the individual on a personal level is an overriding omnichannel paradigm. These individual relationships are the beating heart of retail and we now have technologies that can help foster these personal connections. The store is so much more than a box with stuff in it. Great brands have become social networks unto themselves, where relationships matter most. The store must be the authentic centre of this universe.

Jonathan Glanz, director of omnichannel retail sales

“What’s driving the renaissance of the store within cross-channel and what do retailers need to do to make the most of the opportunities this is producing?”

Today’s consumers expect to conduct their relationships across every digital and physical channel. They expect to move back and forth between channels without disruption and tension. This requires a seamless flow of experiences and brand innovations – where the consumer never loses context with the brand, and the brand never loses sight of the consumer. Given this new retail reality, retailers have accelerated investments in digitising the store to bring the online experience offline.

Following are four key extensions of the digital channel into the stores – serving the connected consumer and growing market share:

(1) Endless Aisle: retailers never want to watch a potential sale walk out the store. Leveraging the commerce platform, leading retailers now sell products from the online channel while the consumer is in the store. This is a great tool for generating incremental sales, as it provides the opportunity to sell products that are either out of stock in the store, or are not typically carried in the store. From the consumer’s perspective, this helps meet a key requirement – providing what the consumer wants, when they want it.

(2) Mobility: access to digital data on mobile devices influences the in-store buying decision. Key information such as detailed product information, user reviews, and recommended products helps the consumer decide if they will, or will not, buy an item from the store.

(3) Personalised Marketing: store personnel need visibility to consumer activity across all channels to personalise the in-store shopping experience. Access to online activity helps increase the selling opportunity in the store channel.

(4) Buy online, Pickup in Store: this capability makes it easier for the consumer to make a decision to purchase, leading to increased sales for the retailer. Also, there is a possibility further to increase sales when the consumer goes to the store to pick up the order.

At Demandware, we believe that extension of the digital channel into the store is a key requirement for the new, consumer-driven, retail reality. The key is having a digital channel that ensures retailers can run faster and continue to innovate in order to meet always-changing consumer demands.

Jamus Driscoll, general manager – EMEA, Demandware

“What’s driving the renaissance of the store within cross-channel and what do retailers need to do to make the most of the opportunities this is producing?”

The next key battleground for commerce platform vendors will be in-store retailing. Many already recognise this and are developing solutions that will enable their customers to replace traditional point-of-sale and legacy store systems. Customers are demanding a more seamless experience wherever and whenever they engage with brands and in-store is certainly one area that has been lagging behind in terms of innovative customer experience. If the commerce platform can provide a rich interface to allow consumers to browse, buy and be served with a detailed understanding of the individuals buying habits and preferences why shouldn’t this interface power in-store interaction? At Reply we call this Proximity Commerce.

However, retailers decide to solve the in-store internetretailing conundrum, whether through deeper integration of their existing store systems and digital channels or through the wider application of their digital and ecommerce trading platform in-store. One thing is for sure: a well-defined business architecture that genuinely supports multichannel retailing is required FIRST.

All too often, we see significant technology investments both in-store and on the digital side, yet the business architecture has not been thought through well enough, leaving customer, product and stock views widely dispersed between various systems. Our advice is to get the business architecture right, then focus on integration and technology investment to support your required architecture.

Clearly, I’m stating the obvious but we are often surprised that the technology strategy and investment is made before the business architecture is defined, and in my view this is a costly and painful mistake.

Mark Adams is partner at Portaltech Reply, a world leader in ecommerce implementation and multichannel integration.

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