Retailoring retail for a mobile-first world: to compete with pure play e-commerce outfits like Amazon.com, companies must bolster their mobile strategies and focus on expertly combining digital and physical shopping realms.
Whether at home or on the go, customers frequently turn to their handheld devices to get things done, and that includes shopping.
It's almost needless to say that e-commerce has undergone vast improvements in recent years, enabling customers to make quick and efficient transactions. For instance, it's well known that Amazon.com makes it particularly easy to find certain products and order them in just a few clicks. So easy, in fact, that recent research from Forrester indicates that the e-commerce giant was responsible for 60 percent of the total growth in U.S. online sales in 2015. The company has even gone so far as to activate dash buttons that allow customers to reorder frequently purchased products without a second thought, and away from their computers.
Yet, while there's little doubt that restocking common household items such as toothpaste and deodorant through Amazon.com has become a routine endeavor, that doesn't mean today's brick-and-mortar stores are in danger of extinction. If that were the case, Amazon.com certainly wouldn't be investing in hundreds of physical bookstores, and Barnes and Noble wouldn't still be around.
For one thing, certain items are still best tested on-site. Selecting clothes, for instance, can be a hassle over the Internet, as there are simply too many questions that can only be answered when you try an item on: How does the fabric feel? Does it look good on me? Can I move around comfortably in it?
Similarly, talking to a sales associate in person has an appeal that technology isn't likely to replace anytime soon. The ability to consult someone's opinion, and leverage her expertise on a product, is something that many shoppers still find valuable.
Forrester predicts that U.S. revenues from online retail will reach $373 billion in 2016, and grow to more than $500 billion by 2020, thanks in part to the upsurge in mobile devices. These include options such as endless aisle, as well as technologies that enable shipping from within stores and picking up from those stores. "While omnichannel efforts are still a work in progress for many merchants, we hear from merchants that these services improve customer satisfaction and directly facilitate faster delivery of product to shoppers," the Forrester report states.
The findings suggest that retailers cannot ignore this reality: Even as customers shop in traditional retail settings, they like using their technology as a complement, whether by doing research and comparing prices, finding discount and sale information, or simply accelerating the checkout period with a digital app.
"For retailers, one of the top initiatives is improving customer engagement--the way they identify customers, the way they work with customers," Perry Kramer, vice president and practice lead at Boston Retail Partners, says. "The increase in usage by consumers on mobile is very dramatic, and it really becomes the tool to fill every gap, if you will, in the customer engagement process. [From] identifying the customer, shopping, customer feedback, coupons, promotions--it's the future, and the future is now."
Offering a blended digital and in-store experience--and doing it well--can be a competitive differentiator. Jason Goldberger, president of Target.com's mobile operations, has gone on record saying that "Target.com cannot beat Amazon" but "Target will beat Amazon." In such a competitive climate, how exactly will it do that?
HELP CUSTOMERS FIND WHAT THEY NEED--WHEREVER THEY NEED IT
Picture this: It's the weekend and you're out walking when you notice a new hole in the sole of your shoe. You take out your phone and begin to search for a nearby place to get a pair of brand name shoes in a specific price range, size, and fit. Following your instincts, you Google "stores selling shoes near me" and are given the choice of three retailers. They're all close by, but to make your decision, you need to know if a store carries your preferred brand, if there are any sales or coupons available, and if the overall experience you get there will be positive. As you begin to browse the Web, it helps if you can get as much information as possible about each store. Which one do you pick? The answer is obvious: You'll likely go with the one that makes all of the above clear.
This is just one reason why it's important that customers are able to conveniently access a retailer's Web site on their mobile device. If shoppers are looking for something on their phone, they'll be more likely to engage with a retailer that has made it easier to find their offerings on a four- to six-inch screen. And this doesn't mean simply offering a desktop version of the Web site on a mobile device either, experts agree.
You'd be hard-pressed to find a company that doesn't have some sort of Web presence. It's reached a point for businesses that even if they "do nothing with mobile, [they'll] still have a site" that's accessible from a mobile device, points out Sucharita Mulpuru, a vice president and principal analyst at Forrester Research. But while it will be accessible, "it might not be good," and if it's not living up to expectations, people will likely turn to a competitor. This is not advisable, since the average retailer strives for as much customer engagement as possible, Mulpuru notes.
Kramer alludes to the fact that when the Internet first surfaced, many companies panicked when they realized they needed to establish a Web footprint. "A lot of [companies] just threw up a Web site quickly so they'd have an e-commerce presence, and a lot of them generated negative impacts because they didn't take the extra months to get it right, [in terms of the] quality of the experience," Kramer says. Similarly, "a lot of retailers have [hastily built] mobile sites, and they forced their associates to use it even if it wasn't ready." This way of conducting operations is becoming less and less acceptable.
Companies must realize that often the first place people encounter them is on a mobile screen. Some of the most popular apps available today, such as Instagram and Snapchat, are designed for mobile devices first.
Abercrombie and Fitch is just one company that has read the writing on the wall. At the 2015 Shop.org Summit, Billy May, the company's senior vice president and general manager of digital, e-commerce, and corporate development, told the audience that the company has had to re-imagine how it would reach teenagers--its key demographic--and consequently is designing for the small screen first.
GET CUSTOMERS TO THE STORE
As Shelley Bransten, senior vice president of retail at Salesforce.com, told attendees during a retail session at the software vendor's Connections digital marketing conference this year, stores are just another stop on the customer journey, not the final destination. Nevertheless, they are an important stop, and some of the most successful retailers in the game use mobile devices as a way of getting customers between their walls.
A good example is the makeup shop Sephora, which makes stellar use of its app by sending invitations for free makeovers, providing customers with an incentive to come in. Similarly, GameStop engages users through loyalty programs that link to apps and interact with aspects of their retail environment.
Mulpuru identifies Walgreen's as another leader in this respect. That the retail chain and its affiliate, Duane Reade, offer customers the option of refilling prescriptions by scanning a barcode with their smartphone sets them apart from competitors. Mulpuru points out that adding scanning technologies to a mobile app is not as expensive as developing an entirely new groundbreaking app in the vein of an Uber, which requires extra components.
Similarly, Target realizes that to keep customers, it must think flexibly and provide a fluid transition between the physical and digital spheres, which leaves open the opportunity for mobile transactions. Over the past few years, the retailer invested in a number of initiatives to bolster its operations. Among these is a program that allows its guests to test out items like patio furniture and buy them online, which saw great success, according to Goldberger. In fact, Goldberger said that sales of patio furniture where people could try it out in the store and order it online were two to three times higher than patio furniture sales at locations that lacked the option.
Target also recently signed on with Pitney Bowes's subsidiary Borderfree to expand its Web presence on a global scale. Customers can buy gifts from the retailer and have them shipped to more than 200 countries, which can simplify holiday shopping for many people, with lower shipping costs, too.
"International shipping marks another step toward Target being able to truly deliver for guests anytime, anywhere," said Target's Goldberger in a statement. "We look forward to getting feedback from our international guests so we can continue to test, learn, and iterate to help ensure we provide a great value to our new international guests."
MAKE THEM FEEL AT HOME
It's no secret that customers should feel welcomed and valued while they are in the store. But with new technologies, the stakes are even higher: They should also feel they are in good hands. More than ever, customers do their own research and are knowledgeable, yet they still expect the people who are representing a company to know more about the products than they, the customers, do.
This is why it is shocking that so many customers end up believing the opposite, according to Bransten. She cited a Salesforce.com study released late in 2015, which found that 67 percent of customers say they feel they know more about the products retailers carry than the associates working there. "We're failing as retailers," Bransten told attendees of the Connections conference, which included many of the world's largest brands.
A big part of being a knowledgeable sales associate is to know more about your customers, and what they're looking for. Before mobile tech really took off, being in the dark about customers was more excusable, as it was much harder for sales associates to recognize loyal customers when they came through the door. If two people walked into a retail location, for instance, the only way to know which of them was a more valued customer (and should take priority) was if the store clerks had interacted with each of them in the past and took note of it. Now, technology makes it possible to recognize customers by logging, and accessing, their history.
Because of this, a number of retailers are investing in technologies that give store clerks better insights as to who the customers are--their preferences, their purchase histories, and other information.
iBeacons also play a crucial role in this process, as they can interact with a customer's mobile device to engage him as he moves through the store, and also alert store associates while providing them with relevant information. Customers who have downloaded Target's mobile app, for instance, can be alerted by iBeacon when they are near certain items, as well as any promotional deals associated with them.
When mobile app users are in an Alex and Ani jewelry store, the display case holding items that are most relevant to a customer lights up in a color that matches each customer's profile, and is based on the preferences each one has communicated to the system.
The fashion retailer True Religion is another such retailer implementing these methods in its stores to provide a standout experience. The retailer uses a black-booking application built by Formula 3 that gives the company insight into each customer, showing purchase history and potential lifetime value. It's "a really gorgeous, AirBnB-esque version of a 'clienteling' tool," says John Hazen, senior vice president of direct to consumer and omnichannel at True Religion. The company has combined this technology with CRM and clienteling capabilities from Aptos (formerly Epicor) to give store associates a better handle on the customers coming in. Store associates are armed with Apple Watch devices and tablets and can engage with loyalty members who enter the store with a phone that activates iBeacon technologies, which, in turn, notify store reps.
"For us, that's the holy grail of personalization," Hazen says. "If the store associate knows when [people] walk into the store, and knows everything that they've purchased, we can deliver better service and a better experience to them."
"We're trying to avoid the creepy side of this," Hazen adds. Thus, the company will be opening this primarily to their best customers--those who opt in and are enrolled in a loyalty program.
CHECK THEM OUT BEFORE THEY CHECK OUT
While it's certainly true that getting customers into the store and engaging them there is a fantastic goal, getting them out at their convenience is also optimal. In recent years, companies have realized that self-checkout options are a highly worthy investment, and that mobile devices can be instrumental in the checkout process.
Accordingly, mobile payment technologies are becoming more sophisticated to enable timely in-store checkouts. A number of companies are investing in point-of-sale technologies that interact with mobile wallets to allow customers to check out as quickly as possible. (As a testament to the need for quick checkouts, Google recently announced that it was testing capabilities that would enable customers to purchase items on their phones without even having to pull them out of their pockets.)
Jessica Langdorf, vice president of the Digital Interaction Lab at Touch-Commerce, points out that Nordstrom arranges it so that customers aren't forced to wait in line for any longer than is necessary by having associates who are equipped to facilitate the checkout process. "That's such an amazing convenience, because everybody hates lines," Langdorf says.
Borrowing from this idea, Touch-Commerce provides technologies that enable this experience with its Touch-Store solution. If "everybody's standing in line, waiting to check out--we'll give them an express lane, a fast pass where your signage communicates that if they SMS text a certain code, or scan a QR code, or if they go to a vanity [or specified] URL, they can sort of preorder."
And its solution serves to offer an express lane for those who are performing simple transactions, many of which have already been completed via mobile device. "If [the transaction] requires something like the person going in the back to grab the product, or accepting cash, and you still need a live human being in the retail store," the solution is built to notify associates to that effect. Customers can then proceed to the checkout counter to pick up the product and finalize the transaction.
Associate Editor Oren Smilansky can be reached at email@example.com.
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|Title Annotation:||RETAIL REPORT|
|Article Type:||Cover story|
|Date:||Jul 1, 2016|
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