According to a recent report by Market Track, 78% of younger shoppers (ages 18-29) said they preferred online shopping over the in-store retail experience. Couple this with the recent impending death of brick and mortars – massive store closings – like those of Bebe, Sears, JCPenney, Macy’s… and it’s clear that strategic change is a matter of survival for the in-store retail experience.
Using Technology to Merge Online and Mobile Solutions with the In-Store Retail Experience
Very quickly we’re witnessing a strategic shift in not only how physical stores are operating, but also how online shopping is optimizing to meet customer needs. According to Bain & Company, during 2016 holiday shopping, physical stores on average saw their Net Promoter Scores (a scoring system that can help to understand customer satisfaction) stay relatively flat, while the Net Promoter Score for the physical stores’ websites also dropped. Using this logic, many retailers are optimizing both the digital (online and mobile) and in-store shopping experience with an omnichannel approach.
The omnichannel approach in retail is why you may be noticing that online retailers are adding physical stores to their strategy, while physical retailers are expanding e-commerce. These strategies that combine the best of the digital and in-store retail experience can meet more customers’ needs, and thus increase sales.
“For omnichannel retailers, websites and mobile apps are not just a means of ordering: They are front doors to their stores. They offer inspiration and community, and they function as test labs, help desks, purchase points, pickup and return locations, and shipping centers,” as explained by Bain & Company.
Converting Online Customers to the In-Store Retail Experience
Many online retailers are beginning to offer another solution for buyers looking to expedite the sales experience, but also prefer to see products in-person before making their online purchase. For example, over the past few years, Gilt.com (known mostly as an online-only retailer) has been offering the option to schedule in-person appointments that merge the in-store retail experience with their online strategy.
A unique spin on a showroom, members note the occasion or pieces they’re shopping for, the Gilt personal stylist pulls the appropriate pieces ahead of time, and assists the customer in selecting the best items for their event, personal style, and budget. Through these shopping appointments, they offer exclusive Gilt members a super-personalized approach that gives their stylists the opportunity to get to know their clients and communicate in-person, leading to more sales and bigger sales.
Artificial Intelligence and Virtual Reality in Retail is Here
Artificial intelligence (AI) as a trend has the ability to change the way we all do business. And retail customers seem to be on board, too. “70% of US millennials, and 62% of millennials in the UK, say they would appreciate a brand or retailer using AI technology to show more interesting products. Furthermore, 72% and 64%, respectively, believe that as the technology develops, brands using AI will be able to accurately predict what they want,” as detailed in research by Sonar.
Here’s how AI works to deliver a personalized retail experience: When a shopper visits an AI-powered e-commerce site, like one created with the new Salesforce AI tool, Einstein, the site uses data on the shopper to create a completely unique experience personalized for them and their interests. So, when you think that a brand has 200,000 regular customers, there could conceivably be 200,000 iterations of their website personalized to each shopper. Not only helpful for e-commerce, now thanks to AI, retailers also have a better understanding of how their shoppers are purchasing, and can make better decisions about product bundles, deals and store planning.
Another digital trend emerging for the retail space is virtual reality (VR). The number of active VR users is quickly growing, and expected to reach 171 million by 2018. Retail stores including Tommy Hillfiger, Lowe’s, and The North Face have already begun experimenting with VR in their stores. You can imagine the way VR works for retail is to give customers a realistic environmental preview of the products they are looking to purchase, such as furniture arrangements, garden installations, etc.
John Vary, innovation manager at retailer John Lewis, explains: “[VR enables you to] bring the catalogue and rooms to life. Putting people in the center of environments makes e-commerce more immersive, and will have a big impact on selling bigger items like furniture, as it will give them confidence to purchase.”
With the retail environment transforming so quickly, from the in-store retail experience to online retail, we will soon find out what works and what is just a passing trend. One thing is for sure – customers are wanting change, and the retailers that implement strategic improvements quickly will be those that succeed.
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