Study: Shoppers want technology that transforms — not replaces — the store experience
For many customers, the ideal digital “store of the future” will streamline payments and make it easier to pick up purchases.
This was according to the “Consumer View,” a study from the National Retail Federation that tracks consumer awareness and adoption rates across a variety of retail technologies.
For example, shoppers are most interested in buy online, pickup in-store (68%) services, in-app store navigation (66%), and mobile payment (65%). Yet, many technologies still fall short of consumers’ expectations, suggesting successful implementation still has a ways to go—even for more mature technologies, the study revealed.
Specifically, more than four in 10 consumers (44%) said their experience with in-store digital displays (44%), tablet-/mobile-empowered associates (43%) or messaging apps (43%) had no impact on their experience. One in 10 said it actually made their experience worse (10%, 8%, 9%, respectively).
Despite wanting more practical solutions, customers are keeping a keen eye on emerging innovations. The two technologies that currently top shoppers’ “must try” lists are 3D printing and drone delivery.
Customers also continue to try new solutions, even if they are not yet mission-critical shopping tools. These include visual search (27%), voice search (21%), augmented reality (20%), virtual reality (18%), and smart dressing rooms (13%).
“While &lsquostore of the future’ technologies dominate the retail conversation, many still remain at the periphery of consumer awareness and usage,” the study said. “Today’s shoppers are much more concerned with the innovations impacting the most fundamental elements of retail: How do I pay for my items and how do I get my purchases?”
Office Depot makes $1 billion acquisition
Office Depot took a first step toward its goal of transforming itself from a traditional office products retailer to a broader business services and technology products platform.
The company announced it has entered into a definitive agreement to acquire CompuCom Systems, a provider of IT services, products and solutions that enable the digital workplace for enterprise, small and midsize businesses, from private equity firm Thomas H. Lee Partners. The transaction is put at approximately $1 billion, which includes the repayment of CompuCom debt and issuance of new Office Depot shares.
Office Depot expects the purchase to add $1.1 billion of revenue and more than $40 million in cost synergies within two years. The retailer said the two companies will be positioned to capture market share in a $25 billion, highly fragmented market as the first entity to provide a nationwide, comprehensive network of enterprise-level tech services and products. CompuCom’s established SMB offering, Tech-Zone, will be placed in Office Depot’s stores, providing immediate scale and driving traffic into the retailer's locations.
“Technology is the office supply of the future,” said Gerry Smith, CEO of Office Depot. “Today marks a significant milestone as we move to provide a unique business services platform for our current and future customers. Acquiring CompuCom is the first step in this new strategic direction. The combination of CompuCom’s enterprise IT services with our millions of customers and approximately 1,400 distribution points gives us the credibility and scale to build a sustainable platform and stand apart from the competition.”
Founded in 1987, CompuCom provides managed IT services to businesses with over 5.1 million unique end users. Its team of approximately 6,000 licensed technicians is the largest employee field technician workforce in North America, providing remote and onsite technology support. CompuCom procures, installs and manages the lifecycle of hardware and software for businesses, and offers IT support services including remote help desk, data centers and on- site IT professionals.
Following the transaction, Thomas H. Lee Partners will hold an equity position in Office Depot of approximately 8% of total shares outstanding.
“We strongly believe in the compelling opportunity to create value for shareholders in this combination and look forward to supporting Office Depot in this next chapter,” said Soren Oberg, managing director at Thomas H. Lee Partners. “Office Depot is an ideal partner for CompuCom, as their strengths are highly complementary and, together, they will have a strong foothold in the fragmented managed services market and greater opportunities for growth.”
Study: Walmart shoppers checking out Whole Foods Market
As Whole Foods Market continues to slash prices at its stores, the chain is attracting competitors’ shoppers — including those from Walmart.
This was according to “Competitive Impact of Lower Prices at Whole Foods,” a report from data intelligence firm Thasos Group.
Immediately following Amazon’s acquisition of Whole Foods in August, the natural foods grocer has significantly dropped prices on merchandise storewide. This effort has increased foot traffic by 17% year-over-year during the week of the price reductions, which began on Aug. 28.
Walmart’s regular customers accounted for the largest percentage (24%) of Whole Foods’ new customers the week of Aug. 28. Kroger (16%), Costco (15%) and Target (11%) comprised the next largest numbers of new customers.
When it comes to customer defections, Trader Joe’s saw the highest rate, with an average loss of nearly 10% daily customers. This was followed by Sprouts (8%) and Target (3%), the study revealed.
Whole Foods’ new customers overwhelmingly belonged to the same upper income demographic as the company’s traditional customer base. Furthermore, defecting customers came from the wealthiest segment of each competing store’s customer base the week of the price cuts.
Since the price cuts were first announced, foot traffic has settled in at lower, but still elevated levels. The price reductions were too insufficient to attract new kinds of customers, as new customer demographics (including income levels and distance driven to a given store) largely matched those of existing customers, the study said.
“Knowing which stores new customers have defected from, what income levels they represent, how far they traveled to get to Whole Foods, and ultimately, whether they will continue to shop there after trying it out, are invaluable pieces of information for both investors and the stores themselves,” said Greg Skibiski, Thasos Group CEO and founder.
“We all know that Amazon’s acquisition of Whole Foods has the potential to be a game-changer in the grocery space, and in the &lsquobrick-and-mortar versus online’ battle more broadly,” he added. “It will be extremely interesting to watch the winners and losers emerge from the data over the coming months.”