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Are you still waiting for the instore technology revolution

Good old physical retail has had a hard time of it in recent years. Household names across the world (not just Woolworths and BHS) have suffered as new and lean upstarts undermine the core viability of age-old business models, which have simply not been flexible enough or quick enough to adapt.

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Are you still waiting for the instore technology revolution

Some of you may remember this VIDEO making the rounds back in 2012.

Hijack, a sneaker store in Guatemala, determined to increase customer loyalty, launched an app-based discount scheme to existing customers. Triggered by GPS technology, customers received a notification when they approached a competitor’s store offering a same-day discount in Hijack. What made this even more exciting for customers was the quicker they got there, the bigger the discount was – it started at 99% and would decrease by a percentage with each second that went by. Every time a discount was redeemed the customer’s Facebook status was automatically updated, promoting it to their social network. Not only is this a great use of technology to differentiate a brand but it drives people instore, offers something of value to their customers and encourages the promotion of their brand online.

But this was four years ago, so where’s the instore technology revolution?

Good old physical retail has had a hard time of it in recent years. Household names across the world (not just Woolworths and BHS) have suffered as new and lean upstarts undermine the core viability of age-old business models, which have simply not been flexible enough or quick enough to adapt. Some studies report that even always-connected millennials spend over 75% of their total retail expenditure in-store, yet there is little evidence of retailers overhauling their in-store systems to empower their staff to the same degree they have empowered an online customer.

In a crowded and competitive marketplace, technology can be used to differentiate a brand from its competitors however it has to be used in a way that compliments other elements of the sales and marketing mix. Over the last 10 years, in the rush towards all things digital it seems that a lot of companies have forgotten about arguably the best sales tool they have in their kit bag – people. It isn’t so much that the value of the physical channel has been forgotten, it is more that the staff who are so integral to the success of these channels seem to have been sidelined as companies focus their digital investment too keenly on the online (not in-store) experience. The fact is that people remain the best and most effective tool when it comes to building customer loyalty and positive emotion around a brand. The old adage that people buy from people is still true.

That’s not to say there has been a dearth of in-store innovation. For a while now I’ve been keeping a keen eye on the much-hyped, yet potentially transformative arrival of beacon technology, waiting to see the killer app arrive. Smart phones from Apple and Google’s Android have supported beacons for well over two years now through iBeacon and Eddystone, but the number of retail initiatives that have gone beyond the early-stage trial phase into mass adoption is disappointingly low.

Give customers something in return for their personal data

The typical use case under trial has been to leverage beacons to send push messages about products and services in-store direct to a shopper’s mobile phone when they walk past a beacon on the shop floor. This approach has not been hugely successful for several key reasons: firstly, the technology relies on shoppers signing up for the service (typically through a paired mobile app), which immediately discourages the casual shopper. Putting this limitation to one side, in-store shoppers are often submerged in an environment where they are already bombarded by point of sale messaging and eye-catching discount & loyalty promotions all around them. You can appreciate a shoppers’ ambivalence when asked to sign-up to a service that will continue the onslaught of messaging through their phone as well, without a clear value exchange.

Consumers are becoming more and more savvy about trading on the value of their personal data: they aren’t necessarily opposed to sharing their data, but they absolutely want something valuable in return. The benefit to the consumer of receiving contextual messaging from in-store beacons is not treasured enough – the shopper is already a captive audience (they’re in-store right now!), so retailers have to work harder than push messaging to elevate the customer experience. This is where in-store retail’s (not so) secret weapon comes in – the sales team.

Invest in instore tech to rival that of your online channels

It is dispiritingly common to find out that as a customer you often know more about the product range offered by a retailer than the store’s own staff. This is because you have a smartphone in your pocket which can browse the retailer’s online store (perhaps over the retailer’s generously provided wi-fi network), whilst the sales associate often has only a fixed, “green screen” till and their stockroom knowledge at their disposal.

This plainly puts the staff at a disadvantage. The only way they are able to level the playing field is by using exactly the same customer facing channels as the customer themselves. This is not so much an issue in the front-end services but in the integration at the back-end.

Progressive retailers recognise that retail digital investment should not be limited to online channels, it needs to enhance the physical channels as well. Investment decisions need to be holistic – tie up the supply chain and stock availability systems across the stores, not just the website and apps. Too many retailers remain wedded to the “online shop” as just another store front, with its own siloed stock pot.

Retailers with genuinely co-ordinated systems are able to offer a more personalised and refined experience for their customers by empowering their staff. Many brands arm their sales staff with tablets, so that they are able to accurately check stock levels, colours and sizes inside the store, without needing to nip into the stockroom. Similarly, click and collect is now a staple of the high street – offering customers the choice of a full range of stock at a convenient time, whilst reducing the costs and complexity of point-to-point delivery. It is a relatively simple process to apply an algorithm to click and collect in order to equip a sales associate with a list of complementary products that can be presented to the customer when they arrive to collect their goods. The human element is key for both of these initiatives – it is a simpler proposition for a salesperson to engage and up-sell face-to-face than to leave the follow-up to a “people also bought…” filmstrip at the bottom of an automated email 24 hours later.

Offering a truly omni-channel retail experience

Beyond these approaches, there are some more ambitious and futuristic uses of in-store technology worth noting. US retailer Rebecca Minkoff has deployed beacons alongside RFID tags and smart mirrors in a particularly clever way. As customers enter the changing room tags attached to the clothing communicate with beacons hidden in smart mirrors. When the customer stands in front of the mirror it becomes a screen, proactively suggesting other items that would work alongside the clothes the customer has brought in to try on. You can inform the sales associates via the touch screen if there are items you want to try on and even save a list of items you like so you can order them via the website later. 

The key to delivering such a seamless and truly omnichannel experience lies in an organisation’s ability to use information across all their available channels. At the moment we see a lot of what is technically called the ‘lipstick on a pig’ scenario. That is to say a gleaming front end and a few clever digital tricks that hide a far less pretty back end. Often an effort has been made to integrate the digital channels but it is still far rarer than it should be for the physical channels to be truly integrated into the mix. Innovations like beacon technology have the power to differentiate a brand from its competitors. However, if not deployed the right way, retailers will never achieve a truly omnichannel shopping experience.

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