Outside inside: reinventing the in-store experience with digital

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The long-touted death of the high street never really happened. Retailers have suffered through growing real estate costs at premium locations as well as increasingly demanding, driven customers who expect more convenience and choice than ever. Many retailers have been impacted by the growth of online retail and e-commerce, and as such scaled down their traditional high street operations. Physical retail stores are in need of reinvention. What can be done?

Enhancing the in-store experience

This is fundamental for retailers: consumers are more demanding and expect much more from their visits to a store, so retailers need to use digital technologies to interact more with them in the store itself.

An early example of retailers addressing this issue was providing in-store Wi-Fi to customers, giving them convenience and access to digital services, but also with the benefit of generating useful customer data for analytics purposes. Other solutions like queue management or point of sale (POS) tools were introduced to make the experience more pleasant and to reduce waiting times.

Virtual and augmented reality (VR and AR) are other examples of technologies that retailers are now using to enhance the in-store experience and to gain a competitive advantage. But there are other ways that can and must be used to get much more from retailers’ leftover real estate.

The digital showroom

Digital transformation gives retailers the chance to scale down brick and mortar operations to be more efficient but to get more out of stores at the same time.

Rather than do away with under-performing stores, they can be transformed using digital technology into much more than "just" a shop. They become a place for consumers to inspect and compare items, get advice and place orders. Goods are then shopped to the customer’s chosen delivery address, reducing retailers’ need for excessive inventory.

Examples of in-store tech abound, like the AR mirror from Seoul-based company FXGear that offers a virtual fitting room. It is already in place in Korea's Lotte Department Store and works by calculating a shopper’s exact height and measurements to give them a precise image of what clothes looks like when worn. Polo Ralph Lauren is a premium brand already using smart dressing rooms in stores that let shoppers adjust the lighting in their individual room, view items in different sizes and colors and more. China’s Moda Polso stores have touchscreen systems on their sales floors that use virtual avatars to let consumers try on items without even having to enter a fitting room.

All these advancements are designed to enhance the customer experience, and according to PwC’s 2018 Global Consumer Insights Survey, 60% of shoppers around the world have now already experienced VR and AR reality while shopping. These digital showrooms can add value in multiple ways: your well-trained sales staff get to interact face-to-face with customers, which delivers a more personalized experience and also presents the opportunity for cross-selling and up-selling.

The fulfillment center possibility

This is another big area of potential for high street retail stores: transforming them into fulfillment centers. Giving your customers a great experience continues with the shopper receiving their completed order where and when they want it, and that means ensuring an efficient last-mile delivery mechanism. And shipping can be an expensive exercise for retailers: according to McKinsey, last-mile delivery accounts for over 50% of shopping costs.

Some retailers are already taking advantage of crowd-based logistics using on-demand companies like Instacart, Lyft and Uber, in addition to long-established courier companies like DHL and FedEx. It is an area where retail is leveraging disruptive digital models to its advantage.

Localized distribution centers let retailers ship an order from a location much closer to the end customer, which enables faster, cheaper delivery – and we know how much today’s customers value speed and convenience. Another possibility is the localized service center, where customers can send or drop products for refund, replacement or repair, like they do with Apple Stores. These approaches can give retailers a big competitive advantage and also improve efficiency, since they can carry inventory both for store walk-ins and for serving customers that live in the area around the store.

Transform your stores with digital thinking

Physical stores have not gone away and remain important elements of the retail mix. And if you have them, you should use them: according to IDC, 56% of retailers view their store formats and chain brands as one of their top three assets for digital transformation. It can be a competitive advantage, and retailers can enhance their offering by building on existing desirable in-store technologies like point of sale (POS) tools, queue management and in-store Wi-Fi that already help give customers a more enjoyable encounter.

The digital showroom brings together the benefits of digital and physical retail, while the fulfillment center at the local level can help add further value to the customer experience by making last mile delivery better than ever. Thinking differently can empower retailers to deliver on orders with a level of excellence that keeps customers happy and drives loyalty, while increasing sales assistant engagement with customers.

Forrester Research reports that retailers experience a 10% to 30% increase in online conversion rates when they are able to ship from their stores. And further to that, shoppers expect fulfillment execution to be a top reason for brand loyalty by 2020. It is time to make the most of your physical stores by thinking digitally. There can be much more to the high street retail outlet than just bricks and mortar.

 

Steve Harris

I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.