What the Age of the Connected Customer Means for Brick-and-Mortar Retailers
For years, retail was neatly divided into two categories: e-commerce and brick-and-mortar. But with the advent of smartphones, digital and physical worlds are melding together, creating a new retail environment in which almost every customer journey involves both online and offline activity. This is particularly true for Generation Z consumers, the first generation to have grown up with digital technologies at their fingertips and who now make up 25% of the total U.S. population.
In response, Amazon has revealed its vision for the future of retail: Amazon Go, a brick-and-mortar grocery store featuring a new checkout-free shopping experience powered by a smartphone app and driven by “computer vision, sensor fusion and deep learning” technologies. While this is exciting for consumers and companies alike, retailers must now brace themselves for a market wherein creating shopping experiences that meld the digital and physical are standard practice.
So how can traditional retailers keep pace with Amazon Go’s disruption and engage the “connected customer?” What technologies do brick-and-mortar stores need to set the foundation for digital-powered shopping experiences? And how is the role of the store associate poised to change with this digital retail revolution?
Taking advantage of mobile
Engaging customers on their smartphones is one of the biggest opportunities in retail. For many of us, smartphones have become an extension of ourselves and we cannot leave home without them. In the U.S., we spend roughly 4.7 hours on our phones every day, relying on our trusted devices for everything from driving directions to product reviews. Given this, it’s not surprising that mobile devices influenced more than $1 trillion in total purchases in 2015 between online and offline transactions.
Customers still prefer shopping in stores for most products, but they want to use their smartphones to inform their purchasing decisions and make the process easier. PwC found that 29% of U.S. shoppers compared prices using their smartphones in store. Shoppers are literally standing in stores, smartphones in hand, looking for information to assist with their shopping trip.
But brick-and-mortar retailers have been slow to adopt technology that engages a shopper in-store, and now competitors such as Amazon are beating them to the punch. Despite this, traditional retailers still have the upper hand over Amazon in the physical retail market given Amazon’s lack of experience managing brick-and-mortar locations.
In order to maintain this lead and engage the connected customer, retailers must work to create in-store digital strategies that enhance the shopping experience and reach customers on their mobile devices.
Laying the groundwork for a digitally powered shopping experience
In order to create digital-powered shopping experiences, retailers must first digitally map their physical stores so they know where everything is located, including products and services, all of the time. This provides the critical context needed for accurate product location, indoor navigation, retail store analytics and store fulfillment programs to function.
Retailers that have digitally mapped their stores can show shoppers exact inventory and product locations — down to the aisle and shelf — on their mobile devices and offer navigation that directs customers along the most efficient path through the store based on their shopping lists.
Knowing precise product location also allows retailers to send personalized deals, product suggestions, coupons and other valuable messages based on shopper preferences and location. The more personalized the offers are, the more likely shoppers are to redeem them. If a shopper is standing in the cleaning products aisle and receives a coupon for their favorite brand of laundry detergent, they’re more likely to engage with the offer and take action. In this way, digitally mapping the store can drive not only customer purchases, but also satisfaction and loyalty.
Evoving role of store associates
As smartphones transform the shopping experience, they are also changing the role of the store associate and empowering them with information at their fingertips to service customers. With the rise of the checkout-free model, store associates will shift away from their role as cashiers, instead focusing on serving as a well-informed resource for customers.
Now that shoppers have access to endless information via their smartphones, they enter stores fully expecting sales associates to readily provide prompt answers to the two most important questions, “Do you have this item?” and “Where can I find it?” Arming store associates with technology that provides visibility into product inventory, product location and store metrics allows them to answer these questions and offer informed, personalized product recommendations. This type of service leads to increased revenue and basket size for retailers and improves the overall shopping experience for customers.
Further, as buy-online-pickup-in-store becomes more popular, store associates will also spend more time fulfilling online orders for in-store pickup. Mobile tools that give store associates insight into product inventory and product location are critical for ensuring orders are filled as quickly and efficiently as possible.
Conclusion
In the age of the connected customer, traditional retailers must find a way to leverage the mobile channel to reach shoppers or risk losing to competitors who are embracing a new digitally-focused era of shopping. Global retailers will continue to invest in technologies that improve in-store shopping experiences, and as the world becomes fully connected, those retailers not planning for the future will inevitably be left behind.