More articles by Gene Paek
Digital Goes Offline: Can Brands Take Back the Store?
ADOTAS - Brands have spent the last decade focused on boosting online sales. They built sophisticated e-commerce websites and spent millions on digital advertising to drive consumers to those sites to make purchases. The future, every retailer knew, was online.
And while e-commerce sales continue to grow – they’ll reach $362 billion in the U.S. alone in 2016, up from $224 billion this year – they still account for just 5 percent of total retail sales. It turns out lots of people still like shopping in stores.
Retailers aren’t about to abandon their e-commerce efforts – especially with the rise in the useof smartphones and increased consumer confidence and acceptance to buy products online. But retailers are increasing their efforts to lure people to, and keep them coming back to, physical stores. How are they doing this? They’re leveraging what they’ve learned online in the last decade to integrate interactive and digital features into their stores.
A few examples of the digital store include in-store interactive kiosks enabling consumers to interact with a brand or go online to research products; iPad displays that let consumers ‘touch-and-interact’ with a brand or product; QR codes people can scan with their smartphones to get more information about a product, participate in a social experience, or download a coupon; NFC mobile payment systems that let people pay with their smartphones; and location-based technologies that automatically push offers to mobile consumers who pass by or enter a store, or let consumers “check in” to receive promotions and discounts.
Retail brands are using these technologies in their own stores, but are also pushing the boundaries in big box stores as well, working with retail partners like Target and Walmart to embed digital technologies into stores at the “shelf level.” With this model, brands are turning some of their shelf space into interactive digital experiences and inserting brand content at the “moment of truth.”
Of course, for years pundits have been predicting the rise of automated, digital stores of the future – and mostly what we have to show for it are self-checkout counters in grocery stores and a few scannable QR codes. But the real difference about what retailers are doing now is two-fold. First, they are applying what they’ve learned in more than a decade developing e-commerce strategies to the store level, and second, they are implementing in-store technologies with the customer in mind. In-store digital technologies in the past were focused on making life easier for the retailer – streamlining ordering and supply chain issues, eliminating some cashier positions, acquiring data on consumer purchases and habits.
Now, consumers are in the driver’s seat. They use social media to browse productrecommendations while in store, compare prices online for every purchase, and don’t hesitate to jump between online, in-store, and mobile shopping to find the best deals. Retailers are experimenting with in-store digital technologies because they have to deliver the best customer experience both online and in-store – or risk losing customers to competitors.
So just which retail brands are “taking back the store” by turning shopping into an interactive digital experience? Here are a few companies my agency, Factory Design Labs, has worked with to launch successful in-store digital initiatives:
Oakley launched in-store touch screens in its own retail stores and select Sunglass Hut outlets to allow shoppers to customize and configure sunglasses. Shoppers could use the screens to customize frames, lenses, and colors – and then have their customized glasses shipped to them directly. The results were astounding for Oakely – a 60 percent conversion rate and millions of dollars of new incremental sales.
Audi USA launched iPad apps for their A8 and A7 vehicles and displayed these iPads in showrooms, enabling car shoppers to learn about the vehicles and get more information on the cars’ technology and performance features themselves, without being disrupted by a salesman. Since few people enjoy shopping for a car – feeling pressured by salespeople on the showroom floor – the self-service app was a hit. After introducing the iPads in showrooms, Audi recorded a 92 percent increase in year-on-year sales. The company also achieved 16 consecutive months of record sales in the U.S. and reported much higher shopper satisfaction in showrooms.
Callaway Golf placed iPads preloaded with a native app in Golf Galaxy and Dick’s Sporting Goods retail stores. Consumers could try out the new Callaway RAZR Fit driver against other competitors’ models, and then input their real results into the iPad app. Nearly 1,000 people inputted swing data, and on average they saw an increase of nearly eight yards using the Callaway RAZR Fit driver versus the competitors. The data from actual golfers provided consumer validation at the retail level – helping Callaway far exceed sales expectations for the driver.
E-commerce will continue to grow rapidly, and retail brands will continue to invest in e-commerce and mobile commerce technologies. But brands should also invest in making the in-store experience “digital” to extend content and product technologies at the retail level. After all, if people prefer shopping online because it’s interactive and convenient, and it offers more choice, why not bring those same value-adds to the store?
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