To brick and mortar or not to brick and mortar? On one hand, eCommerce born retailers from Casper to Birchbox to Zappos in the US and Pepperfry.com in India are rushing to open physical stores in either pop-up or permanent form. Even Amazon is exploring opportunity in the offline realm with their pick up centers and the recently announced bookstore in Seattle. On the other hand, the past 5 years have been turbulent for many traditional retailers, with brands from JC Penney to Borders to Walmart to Gap reducing their store footprint or closing their doors completely.
Yet, it’s far from doom and gloom for brick and mortar. 90% of all retail purchases are still made in stores. Many physical spaces in their current form simply fall short of expectations - particularly for the coveted millennial clan. Shoppers want ease, they want to find things easily, checkout in an instant, experience products in new and interesting ways. All the while they want to be excited, entertained and educated. It’s certainly true that millennials are eCommerce fans. According to Business Insider Intelligence, shoppers between the age of 18 and 24 spend more money online than any other age group. But millennials value both digital and physical experiences. They eat out in restaurants in large groups and hang out at spas, cinemas and bars. As much as any other generation, millennials crave rich human interactions that are only possible in physical spaces.
Digital and physical aren’t arch enemies, they’re partners in crime. A study from Think With Google highlights the need for brands to use mobile to be useful in key moments of need in-store. In fact, 51% of millennials cite their phone as their most valuable shopping tool in store. We believe that by borrowing and adapting digital ideas from online businesses, physical spaces from bank branches to amusement parks to hotels to retail stores can thrive.
Here we present ten digital commandments for physical spaces. They’re no “silver bullet”, and you don’t have to run out and do them all. Each business has unique needs and customer pain points. They are intended as a way for organizations to begin thinking differently about the role and potential of physical spaces.
One of the authors (Nag) lives on a street in Bangalore with a number of clothing stores. He has shopped at all of them, and has loyalty cards at each one. In five years, not one has seriously used technology to get him to their store. They send the odd generic email (‘autumn collection is here!’), but none are based on his preferences or previous purchases.
Contrast this with the experience provided by Flipkart or Amazon. Millions of people look forward to the notifications on their apps because they know they will be highly relevant. Moving from a relevant deal to an online store is of course a small step on a phone.
Technology can and should be used to nurture a more direct marketing relationship. Let the customer know about events they might find interesting, help them make better style choices, and email them when an item arrives that will match something they might already have at home.
The key here is personalized notifications based on the customer’s interest - not just generic promotions or offers.
Customer data is the fuel that makes personalization possible. Online stores have the advantage of being able to easily identify customers, thanks to cookies and other technologies.
Dale Carnegie once observed that a person’s name is to that person the sweetest sound. Once upon a time, a bank manager may have written a personalized thank you note, prepared an important customer his or her favorite drink in advance of an appointment or sent them tickets to a big sporting event. These kinds of personal touches were lost as communities and corporations grew. Technology, however, is being used to reverse that trend.
Sensors, biometrics, facial recognition and RFID technology can each do their part in helping retailers identify their customers in physical spaces.
Physical stores trump their digital counterparts when it comes to being human. Digital touchpoints are rapidly seeking to emulate the human touch (live chat, rich product media, highly curated content etc). That said, stores often fail to capitalize on this human advantage.
Mobile devices with associate facing apps and wearables can help to put relevant customer, product and inventory data in the hands of employees when it counts.
Everyone is different. While some people love to be approached and guided through a store, others shudder at the thought. An orange, peplum dress might be a perfect suggestion for the right customer, but a disaster for another. The right data at the right time means employees can shape the store experience to cater to individual preferences. Arm your associates with the right information so that time spent face to face with customers elevates rather than diminishes the brand.
Product provenance, reviews, available sizes and colors are all infinitely easier to find online compared to in a store. The ability to access important information anytime, anywhere has changed the way people define a great shopping experience, and the bar is higher than ever.
Today’s physical spaces offer little more than the limited information on product packaging and shelf labels. Store associates can be a valuable source, but the accessibility of information often means that customers are more informed than associates.
The best physical spaces give customers access to the same information that can be found online - plus more. This is part of the reason Apple boasts the highest sales sales per square foot in the US. The stores provide a place to touch and interact - but are also a source of rich information. Apple provides a wealth of product information and education with hour-long workshops and summer camps, with each of these events taught by veritable product geeks.
Augmented and Virtual Reality systems are still in their infancy, but several online businesses are starting to use them to overcome barriers to purchase. Ditto.com is a great example. Customers can “try on” designer glasses online, and all customers need is a webcam. This helps customers imagine how they would look and overcomes a common barrier for online shopping.
Physical spaces have a fantastic opportunity to put some of this technology to work. Remember the TED Talk about the Sixth Sense? That was 6 years ago! Since then the world of hardware and connected devices has come of age. Displays come in many forms. Holographic, transparent and mirror displays are just a few options that can are being used to wow shoppers in physical spaces. Microsoft Hololens and Oculus Rift style augmented reality headsets provide exciting possibilities when it comes to offering new experiences in store. Imagine being able to activate your digital wardrobe while wearing Oculus Rift, and viewing exactly how that new pair of jeans will pair with your coat at home. All the while you could toggle through different colors to see which one matches best.
Brick and mortar analytics are given far less attention than store analytics. If we are measuring length of visit, most commonly viewed items, cart abandonment and beyond for digital assets, why isn’t similar information captured in brick and mortar stores? It’s time for clickstreams to unite with what we are calling brickstreams.
Advances in BLE, Wi-Fi and hardware make it much easier to capture interesting data. Information such as dwell time, conversions and wait time can be highly useful when given to the right people to improve store engagement or change product portfolios. Imagine discovering that a product had been tried on 500 times in one location, but was only purchased 3 times. This could be flagging issues with product quality or fit.
Disney uses wearables to power a seamless experience in their theme parks, but also to track an enormous amount of data and provide additional services to customers. Has the guest checked in? Where are they? Did they actually go on all the rides they had booked? These are just some of the data points Disney can use to make a visit to their park much more enjoyable and personal.
Buy a pair of blue jeans from Flipkart, and shortly after you’ll receive a recommendation for a pair of black jeans (a similar product) , or a white shirt (a complementary product). They might send you an email about new products of interest, based on your purchase or viewing history.
Physical spaces, especially large retailers often drown their customers in a sea of too much choice. They let their customers drown when they offer no way to filter the endless options. Winning retailers curate, tailor and customize products to create individualized recommendations both online and in store.
Context sensitive recommendations increase chances of conversion. Mitchell’s significantly increased their store traffic and sales by developing clienteling app for associates to use. The app allows employees to curate individual style recommendations, for example when a new collection arrives they can easily bring up customer profiles and send them the items that match what they like the most.
Online stores have no lines. Shopping online is like having your own personal counter. Somehow, waiting 2 days to receive a product ordered online can seem far less frustrating then waiting in a 10 minute line. Shoppers won’t be ‘wowed’ by your serious lack of line, but they will definitely be more likely to return if they aren’t left sulking in a line that wraps around the store.
Physical spaces have their limitations, but can they make things better than they are today? Self service kiosks and mPoS devices can help reduce queue time by increasing the number of checkout counters without increasing the space or number of staff required in a store.Information from store analytics can be used redeploy staff in the most optimum way across a physical space. Starbucks is busting their lines by allowing busy customers to order ahead of time on their mobile devices.
“In 5 years, we won’t be talking about payments, it’s just going to happen” said Ken Moy, Director of Payments and Emerging Commerce at Subway at the Money 20/20 conference this October. Online channels are currently doing a much better job of making transactions seamless and almost invisible than physical spaces. Think one click checkout and highly automated transactions like those completed with Amazon Dash.
The payments space is moving fast. The future could include crypto currencies like Bitcoin as an accepted payment method. Let shoppers pay in the way that is most convenient to them, rather than dictating what is possible. Zappos recently tested a ‘magic checkout’ in a holiday pop up store. All the products had an RFID tag, and shoppers checked out by standing on an RFID enabled mat. The mat scanned all the items in less than a second and linked with Square’s credit processing technology.
Many hotels and restaurants worldwide are starting to accept a wider range payment methods. Mobile payments and e-wallets are picking up in India. Apple Pay and Square are helping to make offline shopping payments just as seamless as online payments.
Shoppers don’t think in channels, they want to shop in the way that makes sense to them at any point in time. Sometimes that may be moseying into a store on the way home, other times it’s saving an item from Instagram and buying it four weeks later online, or maybe it’s filtering for 2 hour delivery because they needed something 10 minutes ago! Focus on creating a unified experience where it’s easy for shoppers to interact with the brand on their own terms, whenever they want.
Purchasing on mobile phones can be tedious, which might explain the low levels of conversion on mobile devices. Interactive storefronts can help physical spaces serve customers even when they are officially closed. This will allow your physical spaces to interact with customers even when the store isn't open. It brings new meaning to the term "window shopping".
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.