Retail of the future: blended digital/in-store purchasing experiences

For retailers who can adapt to meet changing customer expectations, retail is not a zero-sum game! The future of retail is a blended purchasing experience, where customers investigate products over a combination of digital channels and in-store investigation, and where digital engagement will be just as important as the in-person shopping experience. So how should retailers respond to this increasingly blended future? The key is creating a cohesive customer experience across all channels.

Retail has a history of being a sector in continual disruption

Retail has a long history of being a highly disrupted category

  • Invention of department store disrupted small storefronts.
  • Then suburban shopping malls disrupted urban department stores.
  • Then discount chains like Kmart, Meijer, etc.
  • Then big box “category killers” like Home Depot, Best Buy largely disrupted indoor malls.
  • Category killers disrupted by eCommerce
  • And now we’re experiencing another disruption, as eCommerce evolves into omnichannel retail.

The case of Sears provides a dramatic cautionary tale for all retailers – large and small. The failure of Sears to keep up with shifting trends in consumer purchasing led to its long, slow decline – and ultimately its demise, which previously would have been unthinkable. Just fifteen years ago, Sears was a retail giant that was considered too big to fail! And yet, retailers that fail to adapt to the coming trend of blended digital purchasing are likely headed for a similar fate. As observed by Darrell Rigby for the Harvard Business Review, “Unless conventional merchants adopt an entirely new perspective—one that allows them to integrate disparate channels into a single seamless omnichannel experience—they are likely to be swept away.”

The lines between digital and in-store purchasing are blurring

Experts estimate that digital information already influences about 50% of store sales, and that number is growing rapidly. Again, as Rigby writes, “soon it will be hard even to define e-commerce, let alone measure it.” Already, consumers are shopping in a channel-agnostic fashion, with the average purchase decision happening over a combination of devices and in-store.

Increasingly, technology is making it possible for shoppers to have the best of both worlds. Digital enables customers to have access to a wide selection of products, detailed product information, competitive price information, customer reviews, and tips on how best to use the product. Physical retail stores also enable customers to see and hold products prior to purchase, receive personalized service, and make product purchasing part of a larger entertainment experience.

The combination of the digital and in-store experience also allows customers to bypass the primary limitations of each format on its own. Blended retail experiences bypass the limitations of digital retail by allowing customers to have quick, easy access to the products they order online with strategies like click-and-collect, pick up in store, or next-day shipping. They also bypass the limitations of a purely in-store experience by allowing customers to ensure they have the widest possible selection of products at the lowest price.

This doesn’t mean that consumers will want to use their smartphone for everything while-in store, however. Increasingly, there is a preference in-store kiosks over smartphone apps. Why? The number of apps on the average smartphone has been steadily decreasing year-over-year, because customers hate managing lots of apps. No one likes downloading a store’s app to take part in an offer or experience, only to delete it as soon as they leave.

Fortunately, this problem is easy for stores to solve with only a modicum of hardware by installing in-store kiosks. Kiosks have the same capabilities as apps, but using a kiosk doesn’t require your customer to download and later delete something on their phone. And, so long as the kiosks are easily accessible and well-marked throughout the store, customers can access the directional and product information they need without additional hassle.

What’s on the horizon?

So when looking forward toward this blended purchasing future, what can retailers expect to see?

1. Increased customer expectations

Technology will continue to rapidly change customer expectations for the level of service they receive from retailers. In the near future, shoppers will demand not just personalized service, but more personalized products through mass customization. They’ll also expect that the purchasing experience be as convenient as possible, with many options for product pick-up and delivery, as well as quick and hassle-free returns.

2. IoT and AR playing a bigger role in stores

IoT and AR are often used as buzzwords, but the practical applications of these technologies are growing more widespread in the consumer market, and soon consumers will expect those technologies to be part of their retail experience.

Smart mirrors are rapidly increasingly in popularity, and consumers will start expecting to see them in stores. In 2017, smart mirrors took in $1.75 billion globally, and that number is expected to grow to $4.11 billion by 2025. Smart mirrors are already being used in some flagship retail stores for things like: giving 360-degree views of shoppers while trying on outfits, allowing shoppers to see an outfit on them in different colors, comparing outfits side-by-side, sharing photos to social media to ask friends’ opinions, the ability to control fitting room lighting, and requesting that a sales associate bring you a garment in a different size.

As for IoT, it will be used to provide location-based services to consumers in-store. IoT beacons could help customers navigate stores to find specific products, or notify them of discounts or promotions via their smartphones. When integrated with machine learning, stores could use IoT beacons to provide the kind of personalized product recommendations that consumers have already come to love when shopping online.

3. Personalized in-store service and shopping “experiences” will mean more staff

The number one mistake that retailers make in reaction to the “threat” of digital retail is cutting back on staffing levels for physical stores, because that human service is the one thing that differentiates bricks-and-mortar retail from the impersonal eCommerce experience. That human touch is only going to be more important, as the retail landscape continues to shift toward blended shopping. The primary appeal of shopping in-store is the ability to receive human service, and trends like highly personalized service, click-and-collect, treating shopping as an experience rather than a transaction, and making all parts of the purchasing journey more convenient are going to require high levels of retail staffing to meet customer expectations.

4. Retailers are going to need to get serious about data security.

Already in 2018, sixteen major U.S. chains have experienced large data breaches, compromising the personal information of millions of consumers. As consumers continue to handle more financial transactions digitally, they are going to place a higher importance on companies protecting their data.

What does this look like in the wild?

Next week we’ll wrap up our series on retail by looking at some omnichannel retail success stories. Until then, if you’d like to learn more about how digital customer service can work for you, contact us to speak with one of our digital engagement experts. Or book a demo to see our omnichannel digital customer service platform in action.

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About the Author: Anna Kreider