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The high street goes digital

More and more, digital technologies are changing the way customers shop out in the real world and even customers’ expectations of what a store should be. Paul Skeldon outlines some of the new techniques and technologies

Sadly, shopping in stores is not always a pleasant experience, especially when compared with the whizzy world of digital commerce. Nevertheless, stores still have a massive role to play in the omnichannel world. Creating the right experience across all channels – so that no channel detracts from the others, but rather reinforces them – has become the challenge facing all retailers.

But is the emphasis now shifting away from how stores run, and how ecommerce fits in, to an ethos that is more centred around how the ecommerce platform sits at the heart of the business and helps customers through the whole shopping experience?

What is clear is that online is driving the in-store world, but that consumers are getting less patient

Adam Forrest, senior product and industry marketing manager at Demandware , certainly thinks it is. “You need to have an omnichannel strategy in place to cater to falling patience levels among customers,” he says. “What is clear is that online is driving the in-store world, but that consumers are getting less patient. Our stats show that fewer visits are being made to stores and less time being spent in them when consumers are there. But [overall] growth is normal. What we are seeing is people doing research and really going as far as finding what they want before they go.”

This fundamental shift in how people shop is key to designing shopping experiences and that means getting it right across all channels. And that is becoming a real challenge around using the ecommerce platform effectively.

The mobile factor

So how should retailers meet this challenge? Most in the industry now consider mobile to be the key tool in enabling this omnichannel experience.

Indeed, mobile is driving sales both online and in-store. Mobile is having a hugely positive global effect on retail, leading to higher click-through rates (CTRs) and yielding additional sales, rather than cannibalising online and in-store, finds research by Australian digital performance advertising company Criteo, published this summer.

The 2014 Mobile Flash Report analyses the internet browsing and shopping behaviour of the more than 920 million unique global internet users that Criteo’s advertisements reach, and has found that mobile not only substitutes but also complements desktop usage.

Clare Price, VP of research at Demand Metric, agrees: “Mobile engagements are driving omnichannel growth across online and offline shopping environments. Solution providers that are enabling brands to embrace the mobile platform and modernise interactions with in-store shoppers will be at the forefront of the omnichannel retail customer experience.”

According to a study conducted by Nielsen of more than 2,000 UK smartphone and tablet users focused on the retail, insurance and telecom categories for xAd, a global location ad platform, and Telmetrics, a call measurement technology provider, most mobile activity happens at the beginning of the consumer’s purchase process (56 per cent).

When first turning to their mobile devices, less than 20 per cent of respondents said they knew exactly what they were looking for, making 80 per cent completely open to influence. Consumers are also expecting purchase gratification more quickly. Nearly 50 per cent reported wanting to make their purchase within a day (up 20 per cent since 2013), and 30 per cent are looking to make a purchase within the hour (up 52 per cent since 2013).

There is a huge competitive advantage to this. According to a recent study by SeeWhy, 21.6 per cent of shoppers who use mobile devices while in-store will buy from a competitor and 19 per cent are not likely to buy at all. This leaves a 40 per cent conversion opportunity for retailers.

Speaking from experience

Data-driven retail

“Omnichannel retail needs to revolve around all the customer information you have, but with that living in the background. Where the work needs to be done is not just in aggregating this data, but in assigning revenues to where sales have come from. But beware this can be too focused on completing a transaction in a channel instead of thinking about how people are actually thinking and shopping before they make that happen.”

Adam Forrest, senior product and industry marketing manager, Demandware

Mobile strategy

“Retailers who place the customer firmly at the centre of their mobile retail strategy and recognise the importance of delivering a joined-up retail experience facilitated by mobile are likely to see a rapid change for the better. Increased commercial opportunities which take advantage of inherent mobile user behaviour, improved sales and promotional opportunities via increased consumer touchpoints and superior service thanks to sales staff equipped to meet the cross-channel demands of every customer are just some of the benefits.”

Dan Mortimer, CEO, Red Ant

Beacons of hope

“There has been a shrinkage in retail space, but ultimately the high street is here to stay under the basis that there is nothing better than the personal touch. [Beacons are] the way of bridging bricks and mortar with the online world – in fact, they will be what allows retailers to become digital but also keep the shop going.”

Jonathan Berlin, founder, Iconeme

What is up for debate is how actually to use mobile to make this happen and how, on a practical level, to invest in technology to deliver this sort of before-store, in-store and after-store experience.

“To succeed with a mobile-focused, omnichannel approach, retail organisations must align to the customer’s desired shopping process by proactively triggering personalised self-service, live web chat, or calling options in the omnichannel environment,” says Bernard Louvat, president and CEO of TouchCommerce. “TouchStore caters to these trends in shopper behaviour.”

TouchStore does this using simple mobile offerings, by providing in-store shoppers with the ability either to scan a QR code or send a text message to a special number presented via signage near a specific product display in the store. This opens the TouchCommerce online engagement window on the consumer’s smartphone. In the background, the RightTouch platform then uses product information, prior browsing behaviour and a web-based customer interface to target the customer with specific content or automatically route them to a live chat expert on the selected product. If routed to an expert, the shopper’s prior browsing behaviour is also sent to the agent at the start of the chat session.

In addition to answering questions, the chat agent can provide rich content, such as videos, coupons, guides and surveys, to the shopper.

The more forward-thinking retailers are now looking at instigating this tie-up between the digital world and real-world shops using beacons. Beacons can, if they succeed in gaining mainstream uptake, easily bridge that gap between the real-world shop and the ecommerce world: they can be the in that lets retailers relatively easily connect the digital consumer, via mobile, into existing in-store technology.

That’s the theory, but getting mainstream buy-in is crucial. One technology that may see this happen is Iconeme’s innovative plan to build beacons into shop mannequins.

Iconeme’s founder, Jonathan Berlin explains: “The whole idea is about engaging customers, it saves a lot of time. People don’t like engaging with shop assistants and 89 per cent of consumers use their [mobile] devices while shopping. This technology will change the way people shop on the high street, as it brings together both online and offline retail. Research shows that customers already use their smartphones while shopping in-store, but until now, the retail industry hasn’t realised the full potential of this. The beacon creates a completely new dimension to the shopping experience, by combining the consumer desire to be connected on the go, with the bricks-and-mortar store.”

Edward Smith, the brand manager of Hawes & Curtis , which is trialing the beaconed-up dummies in London, puts it in context: “We chose Iconeme because we want to develop a greater engagement with our customers. Our visual merchandising team help bring our product to life in the windows and now we can have a better understanding of how this impacts the man and woman in the street. The VMBeacon also works 24 hours a day, so we can have instant feedback and instant sales as a result of our displays, even if the store is closed.”

Data-driven retail

However, what all these technologies live and die by – and what really lies behind creating a joined up omnichannel experience that will drive customers across all platforms – is data.

“When it comes to customer experience, the difference between ‘good’ and ‘great’ comes down to the judicious and sensitive use of data to provide a personalised journey with the customer at its heart,” says Dan Mortimer, CEO at Red Ant. “There’s a fine line between ‘clienteling’, where in-store staff and ecommerce sites have access to customers’ wishlists, previous orders, product reviews and preferences, allowing them to act as a personal shopper, and intrusion, where knowing too much personal detail could be seen as a little too ‘big brother’.”

It’s all about relevance, believes the IAB. Its data shows that personalised time-sensitive and location-sensitive offers delivered by mobile are redeemed by 57 per cent of users on the spot, proving that people don’t see use of their data as intrusive as long as it’s personally relevant.

Meantime, sales staff empowered with all-round knowledge about the customer’s wants and needs, as well as stock availability and product information, are able to provide exactly the right level of service, from online ordering in-store to upselling appropriate products, to using beacons to identify and preparing for click-and-collect customers as soon as they enter the store.

But there is a caveat. Data is important and powerful, but it can be overwhelming and it can be very time consuming to make sense of all this information. It is really important to understand what consumers are doing on each device and understand the time spent, the time of day, how does the different usability affect what people do – not just in terms of conversion rate, but what they do next.

“You have to use this to create overall better experiences,” says Demandware’s Forrest. “I am a big proponent of the idea that, for every data analyst you employ, you have two merchandisers fully to implement what that data actually means to the retail business.”

When it comes to customer experience, the difference between ‘good’ and ‘great’ comes down to the judicious and sensitive use of data to provide a personalised customer journey

Adding in new technologies

All this is great theory, but how should retailers make all this work on a practical, platform-centric way? In theory, retailers can junk existing ecommerce and PoS systems, throw out the back end in-store and mobile plug-ins, and install a shiny new cloud-based system that runs the business. But while that is what IBM , SAP, Demandware et al might perhaps want retailers to do, it’s not usually something companies can do.

“Ideally it would be great to junk what they have,” says Forrest. “But most retailers can’t make a business case for that.”

The trick is for retailers to look at what technologies can be added to existing systems. Beacons provide a relatively simple way to lock together in-store technology with the world of mobile. To achieve a more holistic approach, retailers need to look more deeply at how platforms can connect together to form a better interlocked customer view across the company and channels.

The cloud offers some intriguing ways to make this happen. “You have to think about the ecommerce platform as a transient way to get shoppers to connect with your whole shopping experience,” says Forrest. “This is the big thing for us at Demandware: we use the cloud to open up retail by allowing retailers to add the digital store into the real world.”

But while that is the ideal, he adds: “What is really important is that consumer sees the buy side being tied together and that experience is consistent. So, prioritise the buy side/transactional side of it on to one platform. Deploying that in a cloud model makes the best sense: speedy and flexible.”

On a still more practical level, perhaps the hardest part is to redesign the organisation to get alignment around core things such as how attribution is going to be figured out. If you can’t do this then it won’t work. The tech is there but the barriers are within the retailer thinking through the structure and how to reconcile revenues. This is perhaps where the real starting point should be when looking at how to build a cross-channel strategy.

What’s changed?

Falling customer patience levels, coupled with the increased expectations of service driven by ecommerce, has seen the role of the store change – and this has driven how retailers look at their ecommerce platforms. Today it has to be the central hub through which everything runs. And if the platform is the hub, then mobile is the rim, as this is increasingly the point of contact through which consumers online and in-store, and staff as well, are hitting the platform. So we are seeing better mobile integration, improved platform integration and, if a total rethink is needed, growing interest in cloud-based ecommerce platforms to service the changing needs of retailers and consumers alike.

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