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Transformation: Physical Meets Digital at the Cutting Edge of Tech

BY Mimi Lettunich

To say that the last two years have been ones of transition and transformation for brick-and-mortar retailers would be a dramatic understatement. The year of 2017 was one of the worst for brick-and-mortar retail, with several big-name bankruptcy filings and analysts comparing the market to Great Recession-era performance. The year 2018 featured retrenchment and reckoning, as retailers realized that a “business as usual” mentality was fundamentally unworkable in the age of Amazon.

However, focusing too narrowly on sales will be a detriment to brick-and-mortar retailers in 2019. The lesson that should be learned from years of intense competition with e-commerce isn’t to try to move more product than Amazon does – a Herculean task for any retailer – but to create experiences that resonate with shoppers, drive deeper loyalty, and make the in-store encounter indispensable to the consumer.

We live in an era where consumers demand more from the brands they engage with, which means brick-and-mortar stores need outright reinvention to successfully retain their customers in the years to come. Retailers must be willing to evolve their physical spaces to function as playgrounds for education and interaction, rather than simply showcasing products, and guide customers through their buying journey via positive, memorable interactions.

Forward-thinking retailers will be focusing on integrating the physical and the digital to create memorable customer experiences in 2019, and they will be leveraging new technologies in ways that work for them to facilitate those experiences. Retailers that are seeking to capitalize on these trends can draw inspiration from several brands and find cautionary tales in others.

Retailers with a brick-and-mortar presence will begin reimagining their spaces by interweaving digital aspects with the physical, transforming them into intimate marketing channels for meaningful moments. By realizing the advantage of their physical spaces, and by augmenting them with the power of digital outreach, and interaction, these retailers will create experiences for customers that resonate well beyond the time they spend engaging with them.

A (Super) Heroic Undertaking
New technologies like augmented reality (AR) have become more readily accessible to retailers and over the past few years, few brands have found new ways to drive customers into stores and keep them engaged while they’re there. 2019 will be the year many retailers join this pack, though retailers should take care to ensure they are implementing technologies that actually make an impact on their business objectives.

AT&T leveraged AR in an impactful way last year during its Justice League campaign, using motion-activated AR in the window displays of its flagship stores to capture images of passersby and superimpose them on the superheroes’ bodies. This dramatically increased in-store traffic — just by enticing people to walk inside to learn more — through sheer wonderment and delight of what stopped them in the first place. AT&T combined this exterior interaction with an interior retail space completely taken over by Justice League, with wall-to-wall storytelling, exclusive memorabilia, and interactive gaming elements, creating a truly immersive digital/physical experience for shoppers.

An Off-Brand Experience
Whereas AT&T capitalized on (and bolstered) its reputation as a leader in technology with its Justice League campaign, another brand synonymous with technological innovation has stumbled in its recent brick-and-mortar retail experience. Amazon, the resource-rich king of ecommerce with a well-earned reputation for ingenuity, and access to perhaps more customer data than any other brand on Earth, missed the mark with its recent Amazon 4-Star store initiative.

The stores, which display Amazon products that have been rated by consumers with 4 stars or higher, are ostensibly designed to replicate the online Amazon experience. But by taking this approach, Amazon overlooked the opportunity to create a curated, customer-centric physical/digital experience. Instead, the 4-Star stores tend to be cluttered and unfocused, without the surprise and delight and personalization elements that distinguish Amazon.com from other online retailers. What could have been a bold reimagining of the in-person retail experience (like their Amazon Go stores) is instead a poorly realized version of a promising idea.

Borrowing Technology
What might have saved the Amazon 4-Star experience — and what made the AT&T Justice League so engaging — is the use of technology developed for non-retail purposes in a retail environment. Retailers who want to stay relevant to their customers should be looking at other industries for inspiration. Telemedicine, for instance, is becoming commonplace. Would consumers react well to comparable remote interactions with salespeople? Or could AR be leveraged to allow a shopper to “try on” an outfit without going into the dressing room?

Full virtual reality (VR) experiences are already being used in place of traditional test drives at car dealerships. These unique, unexpected, tech-enabled experiences give consumers a great story to tell, but it also gives them an indelible interaction inside (or just outside) the retail space that can lead to repeat business and ongoing loyalty.

Building on Success
So how can retailers replicate the successes of brands like AT&T — and avoid the pitfalls of Amazon 4-Star — to create their own competitive in-store customer experiences this year and beyond? Here are three key ideas to keep in mind:

• Create an experience, not a transaction. Customers can transact anywhere, but they value experiences that surprise and delight, and they will reward brands that can deliver those experiences with loyalty.

• Explore new techniques and embrace new technologies. But not for the sake of having the latest buzzworthy tech. Make sure to use technology like AR to capture the attention of potential customers and engage current customers in meaningful ways that can drive your business forward.

• Use technology strategically. Some experiences are enhanced with digital components, but others may be best achieved through analog means. Embrace a hybrid digital/physical approach, but be clear-eyed about what’s working and what’s not, and don’t be afraid to ditch the digital.

These three keys to customer experience will help brick-and-mortar retailers define 2019 on their terms, and hopefully avoid the negative headlines of years past. More importantly, it will help retailers transform their physical spaces from cold transactional locations or simple showrooms into experience engines that engage customers in the most effective way. And that will set retailers up to compete in the long term, and get better return on the asset that is their physical space.

Mimi Lettunich is the president and executive creative director at experience design agency Twenty Four 7, a data-driven agency that reimagines how customers experience a brand, and how brands use experiences to grow business. 

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